Zheng v. Liberty Apparel Co., No. 09-4890 (2d Cir. 2010)

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09-4890-cv Zheng v. Liberty Apparel Co. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT August Term, 2009 (Argued: July 15, 2010 Decided: August 10, 2010) Docket No. 09-4890-cv - - - - - - - - - - - - - - - - - - - -x LING NAN ZHENG, REN ZHU YANG, YUN ZHEN HUANG, WEN QIN LIN, SAI BING WANG, YE BIAO YANG, RONG YUN ZHENG, HUI FANG LIN, XIU YING ZHENG, JIN PING LIN, HUI MING DONG, YU BING LUO, SAU CHI KWOK, SAI XIAN TANG, YI ZHEN LIN, RUI FANG ZHANG, MEI JUAN YU, MEI YING LI, QIN FANG QIU, YI MEI LIN, MEI ZHU DONG, FUNG LAM, XIU ZHU YE, SING KEI LAM, XUE JIN LIN, Plaintiffs-Appellees, CUI ZHEN LIN, Plaintiff, -v.LIBERTY APPAREL COMPANY, INC., ALBERT NIGRI, HAGAI LANIADO, Defendants-Cross-Claimants -Appellants, NGON FONG YUEN, 88 FASHION INC., TOP FIVE SPORTSWEAR, INC., S.P.R. SPORTSWEAR, INC., 91 FASHION INC., Defendants, LAI HUEN YAM, also known as Steven 1 2 3 4 5 6 7 8 9 10 11 Yam, 998 FASHIONS INC., 103 FASHION INC., Defendants-Cross-Defendants. - - - - - - - - - - - - - - - - - - - -x Before: JACOBS, Chief Judge, PARKER and HALL, Circuit Judges. Appeal from a judgment entered in the United States 12 District Court for the Southern District of New York 13 (Sullivan, J.), after a jury verdict finding that appellants 14 acted as a joint employer of the plaintiff garment workers, 15 and are liable for unpaid and underpaid wages pursuant to 16 the Fair Labor Standards Act, New York state analogs, and 17 New York Labor Law § 345-a(1). 18 defendants remaining arguments in a summary order filed 19 contemporaneously with this opinion. 20 21 22 23 24 25 26 27 28 29 30 31 32 33 We affirm. We consider the VANO I. HAROUTUNIAN (Will Levins, on the brief), Ballon Stoll Bader & Nadler, P.C., New York, New York , for Appellants. JAMES REIF (Anna Roberts on the brief), Gladstein, Reif & Meginniss, LLP, New York, New York, for Appellees. PER CURIAM: Plaintiff s-appellees are 25 Chinese garment workers 2 1 living and working in New York City s Chinatown. In 1999, 2 they sued Liberty Apparel Company and its principals Albert 3 Nigri and Hagai Laniado (collectively, the Liberty 4 Defendants ), and others, for violations of the Fair Labor 5 Standards Act ( FLSA ), 29 U.S.C. § 201 et seq., New York 6 state analogs, see N.Y. Labor Law § 652(1); N.Y. Comp. Codes 7 R. & Regs. tit. 12, § 142-2.2, and New York Labor Law § 345- 8 a(1). 9 a jury trial, and the principal issue was whether the After a lengthy procedural history, the case went to 10 Liberty Defendants were plaintiffs joint employer for 11 purposes of the FLSA and New York state analogs. 12 returned a verdict in favor of plaintiffs, and following 13 resolution of various post-trial motions, the United States 14 District Court for the Southern District of New York 15 (Sullivan, J.) entered judgment accordingly. 16 The jury The Liberty Defendants appeal that judgment. In this 17 opinion, we consider their contention that the district 18 court--rather than the jury--should have determined whether 19 the Liberty Defendants were plaintiffs joint employer. 20 on that issue, we affirm. 21 Defendants remaining arguments in a summary order filed 22 contemporaneously with this opinion. We consider the Liberty 3 And 1 I 2 3 The full factual background of this case is set forth 4 in Judge Casey s opinion in Zheng v. Liberty Apparel Co., 5 No. 99-Civ-9033, 2002 WL 398663, at *1-2 (S.D.N.Y. Mar. 13, 6 2002) ( Zheng I ). 7 resolve the single legal issue that requires an opinion. 8 9 We recount only those facts necessary to Plaintiffs direct employer was Lai Huen Yam, who owned and operated a factory where plaintiffs worked in New York 10 City s Chinatown. 11 relationship with the Liberty Defendants. 12 deliver partially-finished clothes to Yam s factory, and 13 plaintiffs would finish the clothes by sewing the fabrics 14 together and adding buttons, labels, cuffs, and hems. 15 Liberty Defendants would regularly send quality control 16 representatives to the Factory to supervise plaintiffs 17 work. 18 In 1997, Yam entered into a business Liberty would The The dealings between Yam and the Liberty Defendants 19 were non-exclusive; Yam s employees (including plaintiffs) 20 did work for other manufacturers, and the Liberty Defendants 21 subcontracted work to approximately 30-40 other factories. 22 Nonetheless, plaintiffs testified that approximately 70 to 4 1 80 percent of their work was done on Liberty garments. 2 Liberty Defendants paid Yam by the piece (not the hour), and 3 Yam paid plaintiffs the same way. 4 The On average, each plaintiff worked more than 85 hours 5 per week. 6 always--they were paid at a rate below the federal and state 7 minimums, and they were never paid overtime. 8 9 When they were paid for their work--which was not On August 19, 1999, plaintiffs sued Yam and the Liberty Defendants for violations of the minimum wage and overtime 10 provisions of the FLSA and New York state analogs; they also 11 brought a claim pursuant to New York Labor Law § 345-a(1). 12 Plaintiffs later voluntarily dismissed their claims against 13 Yam, either because he could not be located or had ceased 14 doing business. 15 The parties cross-moved for summary judgment, and by 16 opinion and order dated March 13, 2002, the court granted 17 the Liberty Defendants motion in part and denied 18 plaintiffs motion in full. 19 Applying the four-factor joint employment test articulated 20 in Carter v. Dutchess Community College, 735 F.2d 8, 12 (2d 21 Cir. 1984), the court held that the Liberty Defendants were 22 not plaintiffs joint employer within the meaning of the Zheng I, 2002 WL 398663, at *1. 5 1 FLSA and analogous New York state laws. 2 398663, at *7. 3 Zheng I, 2002 WL Plaintiffs appealed, and this Court vacated and 4 remanded on the ground that the district court applied the 5 wrong test for determining joint employment. 6 Liberty Apparel Co., 355 F.3d 61, 64 (2d Cir. 2003) ( Zheng 7 II ). 8 precedent, Zheng II identified six specific factors relevant 9 to whether the Liberty Defendants were plaintiffs joint 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Zheng v. Extrapolating from Second Circuit and Supreme Court employer: (1) whether Liberty s premises and equipment were used for the plaintiffs work; (2) whether [Yam s Factory] had a business that could or did shift as a unit from one putative joint employer to another; (3) the extent to which plaintiffs performed a discrete line-job that was integral to Liberty s process of production; (4) whether responsibility under the contracts could pass from one subcontractor to another without material changes; (5) the degree to which the Liberty Defendants or their agents supervised plaintiffs work; and (6) whether plaintiffs worked exclusively or predominantly for the Liberty Defendants. Id. at 72. In language particularly relevant to this appeal, Zheng 27 II identified three types of determinations that bear on 28 the analysis of these factors: First, there are historical 29 findings of fact that underlie each of the relevant factors. 6 1 Second, there are findings as to the existence and degree of 2 each factor. 3 drawn from applying the factors, i.e., whether an entity is 4 a joint employer. 5 determinations . . . are findings of fact that must be 6 accepted on appeal unless clearly erroneous. 7 id. at 76 n.13 (noting [t]he fact-intensive character of 8 the joint employment inquiry ). 9 determination--the ultimate decision as to whether a party 10 is an employer--is a legal conclusion that is reviewed de 11 novo. 12 the District Court, on remand, deny summary judgment in 13 favor of defendants, it will be incumbent upon the Court to 14 conduct a trial. 15 Finally, there is the conclusion of law to be Id. at 76. Id. at 76. The first two Id.; see also Only the last Zheng II also clarified that [s]hould Id. at 77. On remand, the defendants again moved for summary 16 judgment, and on May 23, 2008, Judge Sullivan denied that 17 motion. 18 287 (S.D.N.Y. 2008) ( Zheng III ). 19 that, while there was no genuine issue of fact that the 20 first, second, and fourth Zheng II factors weighed in the 21 Liberty Defendants favor, there was a dispute of fact 22 regarding factors three, five, and six. Zheng v. Liberty Apparel Co., 556 F. Supp.2d 284, 7 The court determined Id. at 289-95. 1 On February 11, 2009, after a two-and-a-half week 2 trial, the jury found in plaintiffs favor. 3 denied the Liberty Defendants post-verdict motions to set 4 aside the verdict and for a new trial. 5 entered October 26, 2009, plaintiffs were awarded 6 $556,566.76 in damages. 7 The court By final judgment The Liberty Defendants now appeal that judgment. As to 8 the FLSA and the analogous state law claims, they argue 9 that (1) the district court improperly allowed the jury to 10 determine the ultimate legal question whether the Liberty 11 Defendants were plaintiffs joint employer, whereas instead 12 the court itself should have resolved that issue; (2) the 13 district court refused to charge the jury that, as a matter 14 of law, three of the six Zheng II factors weighed in the 15 Liberty Defendants favor (to some degree); and (3) as a 16 matter of law, plaintiffs evidence was insufficient to 17 support the jury s finding of joint employment. 18 § 345-a(1) claim, the Liberty Defendants argue that (1) the 19 statute does not authorize a private right of action, and, 20 alternatively, (2) whether it authorizes a private right of 21 action raises a novel and complex issue of state law such 22 that the district court should have declined to exercise 8 As to the 1 supplemental jurisdiction over that claim, see 28 U.S.C. 2 § 1367(c)(1). 3 This opinion is confined to an analysis of whether the 4 district court properly allowed the jury to make the joint- 5 employment determination. 6 Liberty Defendants remaining arguments are considered in a 7 summary order filed contemporaneously with this opinion. We conclude that it did. The 8 9 10 II In the context of a jury trial, the question whether a 11 defendant is a plaintiffs joint employer is a mixed 12 question of law and fact. 13 application of a legal standard to a particular set of 14 facts. 15 F.3d 426, 437 (2d Cir. 1999) (internal quotation marks 16 omitted). 17 questions of fact and law . . . . 18 Best Freight Sys., 450 U.S. 728, 743 (1981); cf. Holzapfel 19 v. Town of Newburgh, N.Y., 145 F.3d 516, 521 (2d Cir. 1998). 20 Such questions involve[] the Richardson v. N.Y. State Dep t of Corr. Serv., 180 FLSA claims typically involve complex mixed Barrentine v. Arkansas- The jury s role was to apply the facts bearing on the 21 multi-factor joint employment inquiry to the legal 22 definition of joint employer, as that term had been 9 1 (properly) defined by the district court in the jury charge. 2 [M]ixed questions [of law and fact] are especially well- 3 suited for jury determination . . . . 4 F.3d at 437 (quoting Mendell v. Greenberg, 927 F.2d 667, 673 5 (2d Cir. 1990)); see also Kirsch v. Fleet St., Ltd., 148 6 F.3d 149, 171 (2d Cir. 1998); Simms v. Vill. of Albion, 7 N.Y., 115 F.3d 1098, 1110 (2d Cir. 1997) ( A mixed question 8 of fact and law may be submitted to the jury only if the 9 jury is instructed as to the applicable legal standards. ). Richardson, 180 10 In the Liberty Defendants view, the district court 11 should have provided a special verdict form so that the jury 12 could detail its factual findings regarding the various 13 joint employment factors, and so that the district court 14 could then have applied those findings to make the final 15 determination as to joint employment. 16 distort the jury s proper role, described above, of applying 17 law to fact. 18 verdict form would be anomalous in the law, cf. Fed. R. Civ. 19 P. 49(a); Kirsch, 148 F.3d at 171; 9B C. Wright & A. Miller, 20 Federal Practice & Procedure § 2505 ( Wright & Miller ); and 21 appellate courts rarely--if ever--vacate for failure to use 22 a special verdict form, see Skidmore v. Balt. & O.R. Co., But such a rule would Moreover, requiring the use of a special 10 1 167 F.2d 54, 67 (2d Cir. 1948) ( [W]e cannot hold that a 2 district judge errs when, as here, for any reason or no 3 reason whatever, he refuses to demand a special verdict, 4 although we deem such verdict usually preferable to the 5 opaque general verdict. ); Wright & Miller § 2505 ( [A]s 6 numerous courts have held, as evidenced by the many cases 7 cited in the note below, the exercise of th[e trial court s 8 discretion in using a general rather than a special verdict 9 form] is not likely to be overturned on appeal. ). 10 The Liberty Defendants reliance on language from Zheng 11 II is misplaced. That decision recognized that the joint 12 employment question is a mixed one of law and fact: 13 Finally, there is the conclusion of law to be drawn from 14 applying the factors, i.e., whether an entity is a joint 15 employer. 16 id. at 76 n.13 (noting [t]he fact-intensive character of 17 the joint employment inquiry ). 18 Zheng II contemplated de novo review of a joint employment 19 determination, it did so only in the context of summary 20 judgment, not a jury trial. 21 joint employment determination would necessitate use of a 22 special verdict--which, as we explained above, we do not Zheng II, 355 F.3d at 76 (emphasis added); cf. Moreover, to the extent De novo review of a jury s 11 1 require--and would cause the appellate court to tease apart 2 the interwoven elements of facts and law, a project that 3 would raise serious Seventh Amendment concerns, cf. Castillo 4 v. Givens, 704 F.2d 181, 199 (5th Cir. 1983) (Higginbotham, 5 J., concurring)--if it could even be done. 6 7 CONCLUSION 8 For the foregoing reasons, we hold that the district 9 court properly submitted the joint employment issue to the 10 jury. The judgment of the district court is affirmed, 11 subject to the partial vacatur and remand required by the 12 companion summary order. The mandate shall issue forthwith. 12

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