Chen v. Kicho Corporation
- Philip Halpern
- 7:18-cv-07413
- U.S. District Court · Southern District of New York
- 4
In Chen v. Kicho Corporation, Judge Halpern denied the default-judgment and fee motions without prejudice because another potentially jointly liable defendant was still litigating.
Zhongle Chen, the two corporate defendants, and Jin Chun Chen. The ruling delayed consideration of default judgment and attorneys’ fees against the corporate defendants until the case against Jin Chun Chen is resolved.
What happened
Chen v. Kicho Corporation concerns Zhongle Chen’s claims that the defendants failed to pay overtime wages under federal and New York law. Chen sought a default judgment against two corporate defendants after they failed to obtain lawyers or respond, while Jin Chun Chen remained involved in the case.
The court explained that it generally should not enter judgment against some potentially jointly liable defendants while claims against another defendant remain unresolved. Deciding the corporate defendants’ liability first could produce inconsistent damage calculations, and Chen would still need to prove his claims against Jin Chun Chen.
Judge Halpern denied the motion for default judgment without prejudice to renewal after the case against Jin Chun Chen is resolved. He also denied Chen’s separate motion for attorneys’ fees and costs without prejudice to renewal at that time.
The detailed version
- Chen v. Kicho Corporation · No. 7:18-cv-07413
- Philip Halpern
- Dec. 30, 2020
Background
Zhongle Chen brought this action on behalf of himself and others similarly situated against Kicho Corporation doing business as Kicho Japanese Fusion, Lian Hua Corp. doing business as Kicho Japanese Fusion, and Jin Chun Chen. He alleged violations of the Fair Labor Standards Act and New York Labor Law based on unpaid overtime for work exceeding 40 hours in a workweek. He sought unpaid wages, liquidated damages, interest, and attorneys’ fees and costs.
The defendants’ lawyer was permitted to withdraw, and the court ordered the defendants to obtain new counsel. The court later permitted Chen to seek a default judgment against the two corporate defendants because corporations may not proceed without a lawyer. The corporate defendants did not file a notice of appearance or respond to the court’s order to show cause. Jin Chun Chen advised the court that he intended to proceed without a lawyer and remained the actively litigating defendant described in the order.
Motions and Governing Rule
Chen moved for default judgment against the corporate defendants and separately moved for attorneys’ fees and costs. A default judgment is a judgment entered against a party that has failed to defend the case. The court applied the general rule that when several defendants may be jointly liable, a court generally should not enter judgment against a defaulting defendant until the claims against all defendants have been resolved or all defendants have defaulted.
The court noted that Jin Chun Chen could potentially qualify as an employer under the Fair Labor Standards Act and could therefore be jointly and severally liable with the corporate defendants for wage violations. Joint and several liability means that potentially responsible defendants may each be liable for the same damages. The court also found no discernible prejudice to Chen from waiting, because establishing liability against the corporate defendants would not eliminate the need to prove that Jin Chun Chen himself violated the wage laws.
Ruling
The court denied the motion for default judgment without prejudice to renewal after resolution of the case against Jin Chun Chen. “Without prejudice” means the motion may be renewed later; the court did not finally reject the possibility of a default judgment. The court separately denied the motion for attorneys’ fees and costs without prejudice to renewal after resolution of the action.
The court also directed Chen, if he chose to do so, to renew his application concerning the proposed notice of pendency and consent to join the lawsuit before Magistrate Judge Krause. It directed the parties to file a letter to schedule a status conference and directed the Clerk of Court to terminate the pending fee motion and mail the order to the defendants.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.