Ortega v. The Matilda Gourmet Deli Inc

Background

The clerk entered a Certificate of Default against the defendants on March 28, 2022. The matter was then referred to Magistrate Judge Katharine H. Parker to determine damages. Judge Parker recommended entering default judgment for Marco Antonio Ortega against The Matilda Gourmet Deli Inc., De Reimer Food Corp., Nereid Gourmet Deli Inc., Green Arrow Gourmet Deli Corp., Omar Tareb, Sam Tareb, and Moimer Malik Mohammed Tareb.

The recommendation concerned alleged violations of the Fair Labor Standards Act and the New York Labor Law. It recommended $1,680 in unpaid minimum wages, $38,890 in unpaid overtime wages, $40,570 in liquidated damages, $10,000 in statutory damages, prejudgment interest at 9% annually from November 23, 2018, post-judgment interest at the federal rate, and $5,897.50 in attorneys’ fees. The recommendation did not include costs because no request for costs was made.

Review of the Recommendation

The defendants were served with the recommendation by mail on January 20, 2023. No timely objections were filed, and the defendants did not appear during the damages proceeding. In that circumstance, the district court reviewed the record for clear error, meaning an obvious mistake.

The court found the recommendation thorough and well-reasoned but identified two calculation problems. First, for the first six weeks of 2018, the wage difference was $2.00 per hour, not $2.50, because the applicable minimum wage for small employers in New York City was $12.00 and Ortega’s hourly rate was $10. Second, calculating unpaid minimum wages for all 60 hours of a workweek double-counted some amounts because the overtime calculation already covered the hours worked beyond 40.

Ruling

The court ordered that the recommendation be “adopted in part and adopted as modified in part.” It reduced the unpaid minimum-wage award from $1,680 to $1,000, reduced the unpaid-overtime award from $38,890 to $38,800, and reduced liquidated damages from $40,570 to $39,800 so that they matched the revised wage awards.

Judge Schofield ordered an award of $89,600, plus prejudgment interest calculated by the clerk at 9% annually from November 23, 2018, until judgment is entered, and post-judgment interest from entry of judgment until payment at the federal rate under 28 U.S.C. § 1961. The court also awarded $5,897.50 in attorneys’ fees, entered default judgment against the defendants, and directed the clerk to enter judgment and close the case.