Gortat et al v. Capala Brothers, Inc. et al, No. 1:2007cv03629 - Document 272 (E.D.N.Y. 2012)
Court Description: ORDER denying 263 . For all of the foregoing reasons, defendants' motion to decertify the class is hereby DENIED and their motion for entry of judgment on attorney's fees and costs is hereby DENIED without prejudice to renewal. Ordered by Senior Judge I. Leo Glasser on 4/3/2012.
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Gortat et al v. Capala Brothers, Inc. et al Doc. 272 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK ------------------------------------------------x MIROSLAW GORTAT, et al. MEMORANDUM AND ORDER Plaintiffs, 0 7 Civ. 3629 (ILG) (SMG) -v.CAPALA BROTHERS, INC., et al. Defendants. ------------------------------------------------x GLASSER, Senior United States District J udge: Before the Court is the m otion of defendants Capala Brothers, Inc. (“Capala Bros.”) and individual defendants Pawel and Robert Capala (collectively “defendants”) to decertify the class certified by the Court on April 9, 20 10 for lack of num erosity and to obtain entry of judgm ent for certain attorney’s fees and costs. For the reasons set forth below, defendants’ m otion to decertify the class is hereby DENIED, and their m otion for entry of judgm ent on attorney’s fees and costs is hereby DENIED without prejudice to renewal. I. BACKGROU N D The factual background and procedural history to this action is set out m ore fully in a num ber of the Court’s previous decisions, fam iliarity with which is assum ed.1 In short, plaintiffs are laborers and forem en form erly em ployed by Capala Bros., a construction services com pany, who seek to recover on behalf of them selves and others 1 See, e.g., Gortat v. Capala Bros., Inc., No. 0 7 Civ. 3629 (ILG) (SMG), 20 11 WL 6945186, at *1-2 (E.D.N.Y. Dec. 30 , 20 11) (“Gortat V”); Gortat v. Capala Bros., Inc., No. 0 7 Civ. 3629 (ILG) (SMG), 20 11 WL 2133769, at *1 (E.D.N.Y. Mar. 27, 20 11) (“Gortat IV”); Gortat v. Capala Bros., Inc., No. 0 7 Civ. 3629 (ILG) (SMG), 20 10 WL 14230 18, at *1 (E.D.N.Y. Apr. 9, 20 10 ) (“Gortat III”); Gortat v. Capala Bros., Inc., 257 F.R.D. 353, 355-57 (E.D.N.Y. 20 0 9) (“Gortat II”); Gortat v. Capala Bros., Inc., 585 F. Supp. 2d 372, 376-77 (E.D.N.Y. 20 0 8) (“Gortat I”). Dockets.Justia.com sim ilarly situated unpaid wages arising out of defendants’ alleged failure to com ply with, am ong other things, the (1) New York Labor Law, N.Y. Lab. Law § 650 et seq. (“NYLL”); (2) Fair Labor Standards Act, 29 U.S.C. § 20 1 et seq. (“FLSA”); and (3) Portal-to-Portal Act, 29 U.S.C. § 254(a)(1)-(2). On J anuary 15, 20 0 9, plaintiffs m oved to certify as a class pursuant to Fed. R. Civ. P. 23(b)(3) all laborers and forem en em ployed by Capala Brothers during the six years preceding August 29, 20 0 7, the date of the initiation of this action. Defendants m oved to dism iss the class action, contending that the class was insufficiently num erous and that the representative parties do not adequately protect the interests of the class. Gortat II, 257 F.R.D. at 361. The Court on May 5, 20 0 9 rejected these contentions and denied defendants’ m otion. Id. at 365. On April 9, 20 10 , the Court certified the class, concluding that plaintiffs had satisfied all of Fed. R. Civ. P. 23(a) prerequisites, including num erosity. Gortat III, 20 10 WL 14230 18, at *2-3.2 After plaintiffs circulated the notice of pendency, 23 m em bers tim ely opted-out of the class, and the Court subsequently allowed three others to optout after the deadline to do so passed. See Notice of Exclusion filed Aug. 3, 20 10 (Dkt. No. 20 7); Gortat V, 20 11 WL 6945186, at *12. On May 27, 20 11, the Court, on 2 The class is specifically defined as follows: All persons em ployed by Defendants as roofers, bricklayers, m asons, building laborers, drivers, forem en and other m anual workers with the sam e or sim ilar duties during the six years im m ediately preceding the initiation of this action up to the date of this decision who are asserting claim s under the New York State Labor Law for unpaid m inim um wages or overtim e prem ium wages. Gortat III, 20 10 WL 14230 18, at *8. 2 defendants’ m otion, also rem oved 51 m em bers from the class after the m em bers signed form s releasing defendants from liability. Gortat IV, 20 11 WL 2133769, at *1-2. In light of the num ber of m em bers who had either opted-out or signed releases, defendants on J anuary 19, 20 12 m oved to decertify the class, contending the class no longer m eets the num erosity requirem ents of Fed. R. Civ. P. 22(a)(1). Declaration of Felipe Orner dated J an. 19, 20 12 at 3-12 (“Defs.’ Mem .”) (Dkt. No. 263).3 Plaintiffs filed their subm issions in opposition to the m otion on February 10 , 20 12. Declaration of Robert Wisniewski dated Feb. 10 , 20 12 (“Wisniewski Decl.”) (Dkt. No. 264). On February 16, 20 12, defendants filed their reply. Reply Mem orandum in Support of Motion to Decertify dated Feb. 16, 20 12 (Dkt. No. 267). Also on that date, the Court held a final pre-trial conference and set a trial date of May 7, 20 12. II. D ISCU SSION A. Jo in d e r o f all Me m be rs Re m ain s Im p racticable “[A] district court m ay decertify a class if it appears that the requirem ents of Rule 23 are not in fact m et.” Sirota v. Solitron Devices, Inc., 673 F.2d 566, 572 (2d Cir. 1982). Fed. R. Civ. P. 23(c)(1)(c) explicitly provides that “[a]n order that grants or denies class certification m ay be altered or amended before final judgm ent.” Accordingly, “[e]ven after a certification order is entered, the judge rem ains free to m odify it in light of subsequent developm ents in the litigation. For such an order . . . is inherently tentative.” Gen. Tel. Co. of the S.W. v. Falcon, 457 U.S. 147, 160 , 10 2 S. Ct. 2364, 72 L. Ed. 2d 740 (1982); see also Cordes & Co. Fin. Servs., Inc. v. A.G. Edwards & Sons, Inc., 50 2 F.3d 91, 10 4, n.9 (2d Cir. 20 0 7) (a district court that has certified a class under Rule 3 The Orner Declaration is replete with legal argum ent better suited for a m em orandum of law, which defendants, in violation of Local Civil Rule 7.1, have not subm itted. 3 23 “can always alter, or indeed revoke, class certification at any tim e before final judgm ent is entered should a change in circum stances” render a class action no longer appropriate). Even assum ing, as defendants contend, that plaintiffs bear the burden of dem onstrating that Rule 23’s requirem ents continue to be m et,4 “‘the Court m ay not disturb its prior [certification] findings absent som e significant intervening event, or a showing of com pelling reasons to reexam ine the question.’” J erm yn v. Best Buy Stores, L.P., 276 F.R.D. 167, 169 (S.D.N.Y. 20 11) (quoting Doe, 192 F.R.D. at 136-37). “‘Com pelling reasons’ for reexamination ‘include an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent m anifest injustice.’” Doe, 192 F.R.D. at 136-37 (quoting Wilder v. Bernstein, 645 F. Supp. 1292, 1310 (S.D.N.Y. 1988)) (internal quotation m arks om itted). Courts assessing a m otion to decertify a previously certified class should also consider the stage of the litigation and whether an “‘eve-of-trial decertification could adversely and unfairly prejudice class m em bers, who m ay be unable to protect their own interests.’” Id. (quoting Langley v. Coughlin, 715 F. Supp. 522, 552 (S.D.N.Y. 1989)); see also Woe v. Cuom o, 729 F.2d 96, 10 7 (2d Cir. 1984) (finding abuse of discretion where district court decertified the class after granting sum m ary judgm ent in part and expressing concern about “possible prejudice to m em bers of a class” who, as a result of 4 “[A]t least one district court has concluded that the burden of persuasion rem ains throughout the litigation with the party desiring to m aintain certification.” Doe v. Karadzic, 192 F.R.D. 133, 136-137 (S.D.N.Y. 20 0 0 ) (citing Sm ith v. Arm strong, 968 F. Supp. 50 , 53 (D. Conn. 1997)). However, other courts in this circuit have concluded that where, as here, a defendant m oves to decertify a class, the defendant is required to m eet the “‘heavy burden’ of proving the necessity of taking such a ‘drastic’ step.” See, e.g., J .S. v. Attica Central Schools, No. 0 0 Civ. 513S, 20 11 WL 4498369, at *6 (W.D.N.Y. Sept. 27, 20 11) (quoting In re Vivendi Universal, S.A. Sec. Litig., No. 0 2 Civ. 5571 (RJ H)(HBP), 20 0 9 WL 855799, at *3 (S.D.N.Y. Mar. 31, 20 0 9)); see also Gordon v. Hunt, 117 F.R.D. 58, 61 (S.D.N.Y. 1987)). 4 decertification, were unable to take steps to protect their rights); Easterling v. Conn. Dept. of Corr., 278 F.R.D. 41, 42 (D. Conn. 20 11) (“A court should be wary of revoking a certification order com pletely at a late stage in the litigation process.”). Defendants appear to argue that the decrease in the num ber of class m em bers because of opt-outs and the signing of releases constitutes “com pelling circumstances” warranting decertification and largely reprise argum ents that the Court has previously considered and rejected. Defs.’ Mem . at 3-12.5 Specifically, defendants m aintain that decertification is necessary because the size of the class—which they state is 28—is no longer “so num erous that joinder of all m em bers is im practicable” under Fed. R Civ. P. 22(a)(1). Defs.’ Mem . at 5-6. The Court disagrees. Even if the Court accepts defendants’ argum ent that the size of the potential class is 28 m em bers,6 decertification is nevertheless still unwarranted. Fed. R. Civ. P. 5 Defendants cite no authority for this proposition; it appears, however, that if a sufficiently large num ber of m em bers opt-out of a class, the class m ay be subject to decertification. See, e.g., Meijer, Inc. v. Warner Chilcott Holdings Co. III, Ltd., 246 F.R.D. 293, 30 7 n.15 (D.D.C. 20 0 7) (“The Court notes that if a significant num ber of direct purchasers opt out of the proposed class or it becom es apparent that the class is, in fact, substantially sm aller than thirty, the Court m ay alter, am end, or decertify the class pursuant to Rule 23(c)(1)(C).” (citing Alvarado Partners, L.P. v. Mehta, 130 F.R.D. 673, 675 (D. Colo. 1990 )); Lubin v. Sybedon Corp., 688 F. Supp. 1425, 1460 (S.D. Cal. 1988) (noting, in dicta, that “if too m any class m em bers exercised their opt-out right, the court could decertify the class at that tim e”); see also 1 Herbert B. Newberg, Newberg on Class Actions: A Manual for Group Litigation at Federal and State Levels § 3.12 (“[A] court always has the option to decertify the class if it is later found that the class does not in fact m eet the num erosity requirem ent.”). 6 The parties cavil over the size of the class; plaintiffs state that 43 m em bers rem ain in the class, see Wisniewski Decl. ¶ 8, while defendants state that “the class . . . m em bers rem aining aggregate only 28,” Defs.’ Mem . ¶ 12. Defendants also appear to contend that the num ber of class m em bers is actually only 5, id., but defendants’ calculation leaves out the nam ed plaintiffs and m em bers who have neither opted-out of the class nor signed releases but instead who m erely elected not to join the FLSA collective action. 5 23(a)(1) requires that a class be “so num erous that joinder of all m em bers is im practicable.” The Court has broad discretion to determ ine whether joinder of all m em bers is im practicable, and in m aking its determ ination, m ust take into account m ore than sim ply the num ber of m em bers. See, e.g., Gen. Tel. Co. of the N.W. v. Equal Em p’t Opportunity Com m ’n, 446 U.S. 318, 330 , 10 0 S. Ct. 1698, 64 L. Ed. 2d 319 (1980 ) (num erosity requirem ent “im poses no absolute lim itations,” but instead “requires exam ination of the specific facts of each case” and noting in dicta that “[w]hen judged by the size of the putative class in various cases in which certification has been denied, [15 class m em bers] would be too sm all to m eet the num erosity requirem ent”). It is true that courts will generally find that the “‘num erosity’ requirem ent has been satisfied when the class com prises 40 or m ore m em bers and will find that it has not been satisfied when the class com prises 21 or fewer.” Ansari v. N.Y. Univ., 179 F.R.D. 112, 114 (S.D.N.Y. 1998) (citations om itted); see also Newberg § 3.12.7 Defendants have no legal or factual basis on which to om it these individuals from the class. The nam ed plaintiffs—the class representatives—are obviously m em bers of the class. Fed. R. Civ. P. 23(a) (“One or m ore m em bers of a class m ay sue or be sued as representative parties on behalf of all m em bers if . . . .”); Falcon, 457 U.S. 147 at 156 (“[W]e have repeatedly held that a class representative m ust be part of the class and possess the sam e interest and suffer the sam e injury as the class m em bers.” (internal quotation m arks and citations om itted)). So too are the m em bers who elected not to join the FLSA collective action. The Court cannot assum e that because these individuals chose not to opt-in to the FLSA collective action, they also desired to opt-out of the class action. Indeed, som e of these individuals m ay not have opted-in to the collective action sim ply because they worked for Capala Bros. before J anuary 15, 20 0 6 and thus had no FLSA claim . See Notice of Class Action at 2 (“[I]f you worked for Defendants during any tim e between J anuary 15, 20 0 6 and the present, federal law provides that you m ay be able to collect an additional 10 0 % of your dam ages, . . . .”). 7 In this Circuit, num erosity is generally presum ed when the proposed class would have at least 40 m em bers. Consol. Rail Corp. v. Town of Hyde Park, 47 F.3d 473, 483 (2d Cir. 1995). 6 This Circuit has stressed, however, that “[d]eterm ination of practicability depends on all the circum stances surrounding a case, not on m ere num bers.” Robidoux v. Celani, 987 F.2d 931, 936 (2d Cir. 1993). Accordingly, the relevant considerations a court m ay consider include: (1) judicial econom y arising from the avoidance of a m ultiplicity of actions; (2) geographic dispersion of class m em bers; (3) financial resources of class m em bers; (4) the ability of claim ants to institute individual suits; and (5) requests for prospective injunctive relief which would involve future class m em bers. Id. at 936 (citations om itted); see also Odom v. Hazen Transport, Inc., 275 F.R.D. 40 0 , 40 7 (W.D.N.Y. 20 11) (certifying class of 16 truckers in FLSA action where m em bers lacked financial resources to bring suit and, in light of the sm all recoveries that m any of them could reasonably expect, it was unlikely that they would choose to bear the costs of individual lawsuits); Frank v. Eastm an Kodak Co., 228 F.R.D. 174, 181 (W.D.N.Y. 20 0 5) (certifying class of 28 em ployees in FLSA action where sm all potential recoveries by plaintiffs m ade individual suits unlikely); Meyer v. Stevenson, Bishop, McCredie, Inc., No. 74 Civ. 5274, 1976 WL 788, at *2-3 (S.D.N.Y. May 11, 1976) (certifying class of 30 ). The Court previously considered a num ber of these factors in its May 5, 20 0 9 decision and concluded that notwithstanding the “class m em bers are not dispersed across a wide geographic area, these factors on balance suggest that joinder would be im practicable.” Gortat II, 257 F.R.D. at 363. The sam e is true today. “[T]he Court infers, as it m ay, that m any if not m ost of the purported class m em bers are persons with inadequate resources to exercise their rights by prosecuting their own claim s.” Id. (citing Cortigiano v. Oceanview Manor Hom e for Adults, 227 F.R.D. 194, 20 3 (E.D.N.Y. 7 20 0 5).8 Indeed, the class m em bers are im m igrant laborers who speak little English. These individuals lack not only the financial resources to individually bring actions in federal court but also the incentive to do so in light of the relatively sm all recoveries m any of them can reasonably expect to receive.9 See Am chem Prods., Inc. v. Windsor, 521 U.S. 591, 617, 117 S. Ct. 2231, 138 L. Ed. 2d 689 (1997) (“The policy at the very core of the class action m echanism is to overcom e the problem that sm all recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights. A class action solves this problem by aggregating the relatively paltry potential recoveries into som ething worth som eone’s (usually an attorney’s) labor.” (citation and internal quotation m arks om itted)); In re Am . Exp. Merchants’ Litig., 667 F.3d 20 4, 214 (2d Cir. 20 12) (“Suprem e Court precedent recognizes that the class action device is the only econom ically rational alternative when a large group of individuals or entities has suffered an alleged wrong, but the dam ages due to any single individual or entity are too sm all to justify bringing an individual action.”). Without the benefit of class representation, it is thus unlikely they would be willing or able to incur the costs and hardships involved with initiating separate litigations. See Odom , 275 F.R.D. at 40 7 (certifying class of 16 truckers in FLSA action and noting that “[t]he sm all recoveries that m any of the class m em bers could reasonably expect to recover even if they prevailed on the m erits m akes it unlikely that, absent the benefit of class representation, 8 In Cortigiano, this Court concluded on a m otion for class certification that joinder was im practicable, am ong other reasons, because the class m em bers were disabled, and had no “m eans to exercise their rights because of inadequate resources to prosecute their own claim s.” Cortigiano, 227 F.R.D. at 20 4-0 5. 9 Indeed, m any of the class m em bers only worked for Capala Bros. for a relatively short period of tim e. See Defs.’ Mem . Ex. A (listing certain Capala Bros.’ em ployees, their hire dates and the dates of their last checks). 8 they would choose to bear the costs of individual lawsuits”). J udicial econom y also continues to counsel against decertification. See Frank, 228 F.R.D. at 181 (“‘While 25 is a sm all num ber . . . , it is a large num ber when com pared to a single unit. I see no necessity for encum bering the judicial process with 25 lawsuits, if one will do.’” (quoting Phil. Elec. Co. v. Anaconda Am . Brass Co., 43 F.R.D. 452, 463 (E.D. Pa. 1968)). One additional factor weighs against decertification: the stage of the litigation. The inform ation giving rise to defendants’ m otion—the opt-outs and signing of releases by class m em bers—has been in defendants’ possession for well over a year. It was nevertheless only until after the Court scheduled its final pre-trial conference and shortly before the Court set a trial date of May 7, 20 12, that defendants on J anuary 19, 20 12 m ade their m otion for class decertification. Such an 11th hour m otion is of the sort that, if granted, would prejudice m em bers of the class who have not taken independent steps to protect their rights precisely because they were m em bers of the class. See Woe, 729 F.2d at 10 7 (abuse of discretion for district court to decertify class at late juncture in light of possible prejudice to class m em bers); cf. Doe, 192 F.R.D. at 137 (decertification m otion granted, am ong other reasons, where litigation rem ained in “early stages” before class notification sent and “any resulting prejudice to the parties arising from decertification would be m inim al”). Defendants’ m otion to decertify the class is thus denied. B. Ju d gm e n t fo r Atto rn e y’s Fe e s is D e n ie d W ith o u t Pre ju d ice On J une 15, 20 11 J udge Gold ordered plaintiffs’ counsel to “com pensate defendants for attorney’s fees and tim e incurred attending [a] conference” before J udge Gold on that date after plaintiffs’ counsel failed to appear. Defendants now seek to have 9 the Court enter judgm ent against plaintiffs and their counsel for these fees. 10 Defendants’ application is denied without prejudice to renewal as defendants have failed to provide the Court with an adequate basis to determ ine the reasonableness of the requested fees. Any future request m ust contain documentation in support of the fees claim ed, including contem poraneous tim e records. See N.Y. State Ass’n for Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1147-48 (2d Cir. 1983). III. CON CLU SION For all of the foregoing reasons, defendants’ m otion to decertify the class is hereby DENIED and their m otion for entry of judgm ent on attorney’s fees and costs is hereby DENIED without prejudice to renewal. Dated: Brooklyn, New York April 3, 20 12 / s/ I. Leo Glasser Senior United States District J udge 10 Defendants do not state the total am ount they seek. They include a bill sent to plaintiffs’ counsel for $ 891.0 0 , Defs.’ Mem . Ex. F, but also appear to contend that they are entitled to additional com pensation for having to research “cases referred to by plaintiff’s [sic] legal counsel in the dispute of such costs and sanctions, for an additional hour.” Defs.’ Mem . at 14. Defendants provide no legal or factual basis for this additional com pensation. 10
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