-RLM Lujan v. Cabana Management, Inc. et al, No. 1:2010cv00755 - Document 46 (E.D.N.Y. 2010)
Court Description: ORDER granting in part and denying in part 11 Motion to Dismiss. Ordered by Senior Judge I. Leo Glasser on 12/22/2010. (Ibrahim, Alexander)
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-RLM Lujan v. Cabana Management, Inc. et al Doc. 46 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK ------------------------------------------------x G E R AR D O VALD E Z LU J AN , individually and on behalf of all other persons sim ilarly situated who were em ployed by CABANA MANAGEMENT, INC. and/ or GLENN FRECHTER; and/ or any other entities affiliated with or controlled by CABANA MANAGEMENT, I N C. a n d / o r GLE N N F R E CH TE R , Plaintiff, MEMORANDUM AND ORDER 10 - CV - 0 755 (ILG) -againstCABANA MANAGEMENT, INC. and/ or GLENN FRECHTER, and/ or any other entities affiliated with or controlled by CABANA MANAGEMENT, INC. and/ or GLENN FRECHTER, Defendants. ------------------------------------------------x GLASSER, United States Senior District J udge BACKGROU N D Plaintiff Gerardo Valdez Lujan (“Lujan” or “Plaintiff”) brings this purported class action against his alleged em ployers Cabana Managem ent Inc. and Glenn Frechter (“Defendants”) seeking unpaid wages, attorneys fees and costs under the Fair Labor Standards Act, (“FLSA”) 29 U.S.C. §§ 20 1-219, as well as various provisions of the New York state labor laws. Defendant Cabana Managem ent, Inc. is a New York corporation engaged in the restaurant business with its principal place of business in Forest Hills, New York. 1 Dockets.Justia.com Plaintiff alleges that Defendant Glenn Frechter is the owner and president of Cabana Managem ent, Inc., has com plete control of the activities of the com pany, and actively participated in the com pany’s unlawful behavior. Plaintiff is a form er em ployee of the Defendants and was em ployed in various positions on the wait staff since 20 0 4. Lujan alleges that the Defendants have engaged in a policy since that tim e of failing to pay him as well as other dishwashers, runners and busboys earned m inim um wages, overtim e com pensation and have also m ade im proper deductions from their wages, withheld earned gratuities and have not paid the em ployees in a tim ely m anner. Plaintiff alleges one federal and four state law causes of action. Specifically, he alleges that the Defendants: (1) failed to pay him and other em ployees overtim e at one and one half tim es the hourly rate, in violation of 29 U.S.C. § 20 7; (2) failed to m ake paym ents in a tim ely m anner, as required by New York Labor Law § 191; (3) m ade certain illegal deductions from em ployee wages in violation of New York Labor Law § 193; (4) failed to pay overtim e at one and one half tim es the hourly rate in violation of 12 N.Y.C.R.R. § 137-1.3; and (5) illegally withheld gratuities earned by him and other em ployees in violation of New York Labor Law § 196-d. This m otion to dism iss by the Defendants followed. Defendants ask this Court to: (1) dism iss the claim s against Defendant Glenn Frechter because he was not tim ely served with process; (2) dism iss the Com plaint in its entirety because the Plaintiff does not have standing to sue; (3) dism iss the claim s against Defendant Glenn Frechter because the Com plaint is insufficient to establish he was Plaintiff’s em ployer; (4) dism iss the § 193 and § 196-d claim s for failure to state a claim . 2 D ISCU SSION A. Stan d ard o f Re vie w Dism issal of a com plaint is appropriate where a plaintiff does not offer factual allegations sufficient to m ake the asserted claim plausible on its face. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (20 0 9). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the m isconduct alleged.” Id. Determ ining plausibility is “a context-specific task.” Id. at 1950 . However, “detailed factual allegations” are not required in the com plaint. Bell Atlantic Corp. v. Twom bly, 550 U.S. 544, 555 (20 0 7). For purposes of a m otion to dism iss, all factual allegations in the com plaint are accepted as true and all reasonable inferences are drawn in the light m ost favorable to the plaintiff. Arar v. Ashcroft, 585 F.3d 559, 567 (2d Cir. 20 0 9). But, allegations that are solely legal conclusions “are not entitled to the assum ption of truth.” Iqbal, 129 S. Ct. at 1950 . B. Se rvice o f Pro ce s s Plaintiff com m enced this action against the Defendants on February 19, 20 10 . Lujan served process upon the Defendant Cabana Managem ent, Inc. on March 3, 20 10 , well within the tim e period provided by Rule 4(m ) of the Federal Rules of Civil Procedure. However, he did not serve the Defendant Glenn Frechter until J une 29, 3 20 10 , 130 days after filing the com plaint, and only after being alerted to the deficiency by the Defendants’ m otion. Rule 4(m ) provides that a district court m ust “dism iss the action without prejudice” or order that “service be m ade within a specified tim e” where “a defendant is not served within 120 days after the com plaint is filed.” Fed. R. Civ. P. 4(m ). The court m ust deny the dism issal where the Plaintiff shows good cause for the failure to m ake tim ely service. Id. Here, the Plaintiff has neither provided an excuse for the failure to tim ely serve Mr. Frechter nor has he acknowledged that the service on J une 29, 20 10 was deficient. (Pl.’s Opp. Mem . at 10 .) Because the Plaintiff failed to serve Mr. Frechter in a tim ely m anner, and has not shown good cause for the failure to do so, the Court will dism iss the com plaint against Mr. Frechter without prejudice on condition that Mr. Frechter be properly served within twenty days from the date of this Order or show good cause for failure to do so. C. Stan d in g The Defendants also argue in their m otion to dism iss that the Plaintiff is without Article III standing to sue, alleging that Lujan failed to identify his job title(s), am ong other things. This, the Defendants argue, deprives the Plaintiff of standing because “what reasonable plaintiff would endeavor to om it from his claim for relief the capacity in which he was em ployed?” (Defs.’ Reply Mem . at 1.) 4 The judicial power bestowed upon the federal courts in Article III § 2 of the Constitution extends only to “Cases” and “Controversies.” This requirem ent is only satisfied where a Plaintiff has standing. Sprint Com m unications Co., L.P. v. APCC Servs., Inc., 128 S. Ct. 2531, 2535 (20 0 8). Standing is established where a defendant shows three things: (1) an injury in fact (i.e., a “concrete and particularized” invasion of a “legally protected interest”); (2) causation (i.e., a “fairly ... trace[able]” connection between the alleged injury in fact and the alleged conduct of the defendant); and (3) redressability (i.e., it is “likely” and not “m erely speculative” that the plaintiff's injury will be rem edied by the relief plaintiff seeks in bringing suit). Id. (citing Lujan v. Defenders of Wildlife, 50 4 U.S. 555, 560 -61 (1992)). Here, the Com plaint adequately establishes all three constitutional criteria. Lujan alleges that he was an em ployee of the Defendants, that the Defendants illegally withheld wages that he him self was legally entitled to, causing him econom ic harm . Those allegations plainly describe an invasion of the Plaintiff’s legally protected interest, as well as causation of the injury on the part of the Defendants. Finally, the Plaintiff seeks m onetary dam ages for the econom ic harm s he suffered, m eeting the redressability prong. See, e.g., Wernsing v. Thom pson, 423 F.3d 732, 745 (7th Cir. 20 0 5) (“[I]njuries com pensable in m onetary dam ages can always be redressed by a court judgm ent.”). This prong of the Defendants’ m otion to dism iss is without m erit and is therefore denied. 5 D. In s u fficie n cy o f Co m p lain t to Alle ge Fre ch te r W as Em p lo ye r Defendants next allege in their m otion to dism iss that the Com plaint should be dism issed as against Defendant Frechter because it does not “plausibly establish that Mr. Frechter was an em ployer with respect to Plaintiff Lujan as required under the FSLA [sic] and New York Labor Law.” (Defs.’ Mem . of Law at 7.) (em phasis om itted). Because the Court has already dism issed the claim s against Defendant Frechter without prejudice it need not rule on this basis for dism issal. E. State Law Claim s The Defendants next challenge two of the Plaintiff’s state law claim s, those arising under § 193 and § 196-d of New York’s Labor Law.1 They argue that the § 193 claim is just another claim that the Defendants failed to pay wages m asquerading as a cause of action for illegal deductions, and they argue that both causes of action are not sufficient to m ake a plausible claim for relief under Rule 8 of the Federal Rules of Civil Procedure. 1 The Plaintiff’s claim under § 193 is contained within the second and fourth causes of action in the Revised First Amended Complaint. The claim under § 196-d is contained within the fourth cause of action. The second cause of action also contains a claim arising from an alleged violation of New York Labor Law § 191, which the Defendants do not challenge in their motion to dismiss. Thus, the Court will interpret the claims under § 191, § 193 and § 196-d to be three separate causes of action, only two of which the Defendants move to dismiss. Section 191 states: “A manual worker shall be paid weekly and not later than seven calendar days after the end of the week in which the wages are earned; provided however that a manual worker employed by an employer authorized by the commissioner pursuant to subparagraph (ii) of this paragraph or by a non-profitmaking organization shall be paid in accordance with the agreed terms of employment, but not less frequently than semi-monthly.” N.Y. Lab. Law § 191 (McKinney 2010). 6 a. §193 Section 193 provides in essence that, except for a few narrow exceptions, “[n]o em ployer shall m ake any deduction from the wages of an em ployee.”2 In addition to arguing that this cause of action fails to state a claim , the Defendants argue that even if it could be read to state a claim , it states a claim of “failure to pay m inim um wages and overtim e” which does not constitute a violation of New York Labor Law § 193.3 (Defs.’ Mem . of Law at 11.) The claim by the Plaintiff labeled as a violation of § 193 does, in the Court’s view, plead a cause of action. The § 193 claim is not that the Defendants “fail[ed] to pay wages;” rather, the Plaintiff has alleged im proper deductions that go to the heart of § 193. For exam ple, ¶ 30 of the Com plaint states that the “Defendants engaged in a regular pattern and practice of m aking deductions from the earned wages of the Nam ed Plaintiff and other m em bers of the putative class for reasons other than credit card service fees, and for reasons other than those allowable under New York Labor Law § 193 . . . .” Paragraph 70 of the Com plaint further states that “[b]y im properly charging the Nam ed Plaintiff and other m em bers of the putative class for surcharges and fees and other im proper deductions, Defendants violated New York Labor Law § 193 by m aking 2 Section 193 states: 1. No employer shall make any deduction from the wages of an employee, except deductions which: a. are made in accordance with the provisions of any law or any rule or regulation issued by any governmental agency; or b. are expressly authorized in writing by the employee and are for the benefit of the employee; provided that such authorization is kept on file on the employer's premises. Such authorized deductions shall be limited to payments for insurance premiums, pension or health and welfare benefits, contributions to charitable organizations, payments for United States bonds, payments for dues or assessments to a labor organization, and similar payments for the benefit of the employee. N.Y. Lab. Law § 193 (McKinney 2010). 3 For purposes of efficiency, the Court will first address whether the claim is properly a cause of action under § 193 and then turn to the inquiry of the sufficiency of the complaint under Iqbal. 7 im proper deductions from the wages of the Nam ed Plaintiff . . . .” These factual allegations read together clearly convey to the Defendants that they violated § 193. In re Apkon, 236 A.D.2d 225, 653 N.Y.S.2d 120 (1st Dept. 1997), cited by the Defendants, is thus com pletely inapposite to the case here. In that case the First Departm ent overturned an arbitration award where the arbitrators found that “m onies due as a result of m utually agreed upon equity participations by the em ployee in the em ployer’s investm ents involving risk of loss constitute ‘wages’ … [and] that the refusal to pay such m onies constituted a ‘deduction’ from wages within the m eaning of Labor Law § 193.” Id. at 225. Here, Lujan has properly alleged im proper deductions from wages, not the “refusal to pay” m onies owed. b. Failure to State a Claim The Defendants’ final basis for dism issal is that the Plaintiff’s causes of action under § 193 and § 196-d m ake no factual allegations and therefore fail to state a claim upon which relief m ay be granted. See Fed. R. Civ. 12(b)(6). The only relevant requirem ent of Federal Rule of Civil Procedure 8(a)(2) is that a com plaint m ust contain a “short and plain statem ent of the claim ” showing that the Plaintiff is entitled to relief. “[D]etailed factual allegations” are not required. Bell Atlantic Corp. v. Twom bly, 550 U.S. 544, 555 (20 0 7). All that is required is sufficient factual m atter, accepted as true, to “state a claim to relief that is plausible on its face.” Id. at 570 . 8 The Defendants dem and to know the “am ount, frequency, [and] date [on which] any alleged violation occurred,” a dem and which is not warranted. (See, e.g., Defs.’ Reply Mem . at 15.) The Federal Rules do not require a plaintiff to plead his entire case in the com plaint, and im portantly, “[s]pecific facts are not necessary.” Erickson v. Pardus, 551 U.S. 89, 93 (20 0 7). What is required is that the Com plaint “give the defendant fair notice of what the claim is and the grounds upon which it rests,” which this Com plaint sufficiently does. Here, the allegations in the Com plaint m eet these requirem ents. With regard to the § 193 claim , the Plaintiff alleges that the Defendants “engaged in a regular pattern and practice of m aking deductions from the earned wages” of the Plaintiff “for surcharges and fees and other im proper [purposes].” Furtherm ore, they did so for reasons “other than those allowed under Labor Law § 193.” (Revised First Am . Com pl. ¶ 30 , ¶ 70 .) These claim s are sufficient to sustain a claim for a violation of § 193 that is facially plausible. With regard to § 196-d, the allegations in the Com plaint also m eet the requirem ents to survive a Rule 12(b)(6) m otion. Section 196-d provides, in pertinent part, that “[n]o em ployer . . . shall dem and or accept . . . any part of the gratuities received by an em ployee, or retain any part of a gratuity . . . .”4 The Plaintiff alleges that he received gratuities “provided by Defendants’ patrons” and that the Defendants 4 Section 196-d states in full: No employer or his agent or an officer or agent of any corporation, or any other person shall demand or accept, directly or indirectly, any part of the gratuities, received by an employee, or retain any part of a gratuity or of any charge purported to be a gratuity for an employee. This provision shall not apply to the checking of hats, coats or other apparel. Nothing in this subdivision shall be construed as affecting the allowances from the minimum wage for gratuities in the amount determined in accordance with the provisions of article nineteen of this chapter nor as affecting practices in connection with banquets and other special functions where a fixed percentage of the patron's bill is added for gratuities which are distributed to employees, nor to the sharing of tips by a waiter with a busboy or similar employee. N.Y. Lab. Law § 196-d (McKinney 2010). 9 “im properly withh[eld]” those gratuities given to him by the patrons, therefore violating New York Labor Law § 196-d. (Revised First Am . Com pl. ¶ 67, 69.) These factual and legal allegations also give the Defendants “fair notice of the claim and the grounds upon which it rests,” and therefore are sufficient to state a facially plausible claim for relief under New York law. Erickson, 551 U.S. at 93. Accordingly, Defendants’ m otions under Fed. R. Civ. P. 12(b)(6) are denied. CON CLU SION For the foregoing reasons, the m otion to dism iss by Cabana Managem ent Inc. and Glenn Frechter is granted in part and denied in part. SO ORDERED. Dated: Brooklyn, New York December 22, 2010 ___________/s/_______________ I. Leo Glasser United States Senior District Judge Copies of the foregoing memorandum and order were electronically sent to: 10 Counsel for the Plaintiff Marc A. Tenenbaum Virginia & Ambinder LLP 111 Broadway, Suite 1403 New York, NY 10006 Counsel for the Defendant Jeffrey W. Brecher Jackson Lewis LLP 58 South Service Road, Suite 410 Melville, NY 11747 11
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