Aponte v. Clinton Street Pizza Inc.

Background

Nancy Aponte and Angelo Gabriel Alves Marques sued Clinton Street Pizza Inc., doing business as Rizzo’s Fine Pizza, and Francesco Taormina, Amedeo Orlando, and Alexander Lyudmir. The plaintiffs alleged that the defendants were their former employers and violated the Fair Labor Standards Act (FLSA), New York Labor Law (NYLL), Title VII of the Civil Rights Act of 1964, and the New York City Human Rights Law.

The wage-related claims alleged unpaid wages, unpaid overtime, stolen tips, and failures to provide required wage notices and statements. The discrimination-related claims alleged gender discrimination against Aponte and discrimination based on sexual orientation against Gabriel. The plaintiffs sought damages and other relief.

Only Lyudmir appeared and filed an answer, representing himself. Orlando had not been served. Clinton Street Pizza Inc. and Taormina had been served but did not appear, and the Clerk entered certificates of default against them. The plaintiffs then sought default judgment against those two defendants, requesting approximately $350,000 from each.

FLSA and NYLL claims

The court explained that default judgment is a two-step process: the Clerk first enters a default when a defendant fails to defend, and the court then determines whether the complaint’s well-pleaded facts establish a valid claim and support judgment. A defendant’s default does not automatically establish that the plaintiff is entitled to relief.

The court held that the complaint did not establish FLSA coverage. FLSA coverage can arise through enterprise coverage, based on the employer’s involvement in interstate commerce and its annual sales, or individual coverage, based on the employee’s own work involving interstate commerce. The complaint did not allege facts about interstate commerce or the defendants’ gross sales. It also did not allege facts showing that Aponte’s work as a server or Gabriel’s work as a cashier involved the movement of people or things between states. The court declined to infer an interstate-commerce connection merely from the fact that the defendants operated a restaurant.

The court therefore found that the complaint failed to establish a basis for FLSA liability and denied without prejudice the default-judgment application as to Count One. Because the FLSA claim was dismissed and the court declined to exercise supplemental jurisdiction—the power to hear related state-law claims—over the NYLL claims, it also denied without prejudice the application as to Counts Two and Three.

Title VII and NYCHRL claims

The court found that Count Four, the Title VII claim, named only Clinton Street Pizza Inc. and alleged discrimination against Aponte. Individuals cannot be held liable under Title VII. The complaint also did not allege that Clinton Street Pizza Inc. had at least 15 employees, an employer-size requirement for Title VII coverage. The court therefore found that the complaint failed to plead an essential element of Aponte’s Title VII claim and denied without prejudice the default-judgment application as to Count Four.

The court noted that the complaint also did not clearly establish that Aponte had received a required right-to-sue letter after filing an administrative charge. The court did not treat that issue as fatal at this stage because exhaustion is an affirmative defense that a defaulting defendant may waive or forfeit. The court instead relied on the missing employee-numerosity allegation and other uncertainty about the Title VII claim.

Because the Title VII claim could not support default judgment as pleaded, the court declined to exercise supplemental jurisdiction over the New York City Human Rights Law claim. It denied without prejudice the application as to Count Five.

Amendment and further proceedings

The court discussed the risk of inconsistent judgments when some defendants default and another defendant continues to litigate. Because the plaintiffs sought joint and several liability, the court stated that it would avoid deciding damages against the defaulting defendants until Lyudmir’s potential liability was determined.

The court ordered that, if the plaintiffs wished to continue, they had to file a letter explaining how an amended complaint could correct the pleading problems identified in the opinion, together with a red-lined proposed amended complaint. They also had to clarify whether they intended to continue pursuing claims against Lyudmir and Orlando. The plaintiffs were required to serve the opinion and later submissions on specified defendants and file proof of service.

Disposition

The court denied without prejudice the plaintiffs’ application for default judgment against Clinton Street Pizza Inc. and Taormina. It did not enter a damages judgment. The court stated that it might consider a renewed default-judgment application if the pleading defects were cured and other proceedings were completed, but it would not decide damages against the defaulting defendants until Lyudmir’s proceedings and potential liability were resolved.