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LIU v. JEN CHU FASHION CORP.

January 7, 2004.

ZENG LIU, et al., Plaintiffs, -against- JEN CHU FASHION CORP., JEN CHU APPAREL INC., W & C FASHION CORP., WONG CHAI SPORTSWEAR INC., Y & C MFG. INC., CALVIN CHEN, WINNIE YOUNG CHEN, JEN JEN OF NEW YORK INC., and H.L.S. FASHION CORP., Defendants


The opinion of the court was delivered by: ANDREW PECK, Magistrate Judge

REPORT AND RECOMMENDATION

On October 16, 2003, Judge Rakoff (to whom the case was then assigned) entered a default judgment for plaintiffs against defendants Jen Chu Fashion Corp., Jen Chu Apparel, Inc., W & C Fashion Corp., Wong Chai Sportswear Inc., Y & C Mfg. Inc., Jen Jen of New York Inc., and Calvin Chen (hereafter collectively "the Calvin Chen defendants"). (Dkt. No. 64:10/16/03 Order.)*fn1

Defendants Winnie Young Chen and her company, H.L.S. Fasion Corp. (hereinafter collectively "the Winnie Chen defendants") were represented by John Courtney, Esq., but Mr. Courtney moved to withdraw as counsel. (See Dkt. No. 65.) The Court initially denied the Page 2 motion because Mr. Courtney "lost" his client, i.e., had no means to reach her. (See Dkt. Nos. 65 & 68:10/17/03 & 11/3/03 Orders: see also Dkt. No. 71:11/26/03 Courtney Letter to Court.) Neither Mr. Courtney nor Ms. Chen have responded to plaintiffs' inquest/summary judgment motion. (See Dkt. No. 70: 11/13/03 Order.) By memo endorsed Order dated December 22, 2003, the Court granted Mr. Courtney's renewed withdrawal application. (12/22/03 Memo Endorsed Order.) The Court has heard nothing from Winnie Chen. Therefore, judgment against the Winnie Chen defendants should be entered on default.

  For the reasons discussed below, the Court should enter judgment for plaintiffs against the Calvin Chen defendants and the Winnie Chen defendants jointly and severally, for damages (including prejudgment interest) of $556,577.07, attorneys' fees of $20,355, and costs of $90.

  FACTS

  "Where, as here, `the court determines that defendant is in default, the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true.'" Chen v. Jenna Lane, Inc., 30 F. Supp.2d 622, 623 (S.D.N.Y. 1998) (Carter, D.J. & Peck, M.J.) (quoting 10A C. Wright, A. Miller & M. Kane, Federal Practice & Procedure: Civil 3d § 2688 at 58-59 (3d ed. 1998)).*fn2 Page 3

  There are twenty-three plaintiffs — five original plaintiffs and eighteen "opt in" plaintiffs pursuant to 29 U.S.C. § 216(b). (See Dkt. No. 75: Plfs. Inquest Br. at 2 n.1.)

  The Amended Complaint (Dkt. No. 5) alleges as follows:

  Plaintiffs are Chinese immigrant garment workers who worked long hours for the defendant companies producing expensive garments but were not paid minimum wages or overtime. (Dkt. No. 5: Am. Compl. ¶ 1.) Plaintiffs were paid either by the hour or by the piece. (Am. Compl. ¶ 6.) Plaintiffs worked at a garment factory at 519 Eighth Avenue in New York City that had various corporate owners, all of which were controlled by Calvin Chen and his then-wife Winnie Chen. (Am. Compl. ¶¶ 8-14.) Defendants thus were employers and joint employers of plaintiffs under the Page 4 Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq., and the New York Labor Law. (Am. Compl. ¶ 16.)

  According to the Amended Complaint:
Plaintiffs worked for defendants generally seven days a week. Prior to May 1999, the hourly workers, Liu and Chen, generally worked eleven hours a day during the weekdays and ten and eight hours a day on Saturday and Sunday. Plaintiff Huang and the piece workers, plaintiffs Jiang and Li, generally worked twelve hours a day during the weekdays and ten and eight hours a day on Saturday and Sunday. They were rarely paid overtime; and when they were, it was for only a few hours and not the 30 to 40 hours of overtime that they generally worked. The piece workers sometimes were unable to earn the minimum wage. None of the plaintiffs ever received spread-of-hours pay — an extra hour's pay for each ten-hour day.
(Am. Compl. ¶ 17.)

  Following a New York State Department of Labor visit to the factory, defendants began maintaining two sets of books — one reflecting plaintiffs' actual hours worked and "the other a false record reflecting a workweek with no, or almost no, overtime," and "[p]laintiffs were required to sign both [time] cards." (Am. Compl. ¶ 37; see also id. ¶¶ 38-43.)

  The Amended Complaint asserts three causes of action: (a) a federal wage claim for defendants' "failure to pay plaintiffs the minimum wage and overtime pay for work over 40 hours per week" (Am. Compl. ¶ 53), (b) a state wage claim for "failure to pay plaintiffs their wages, minimum wages, and overtime pay for work over 40 hours per week" (Am. Compl. ¶ 55), and (c) a New York spread of hours claim for "fail[ure] to pay plaintiffs an extra hour's pay for every day that plaintiffs worked over 10 hours" in violation of New York Labor Law (Am. Compl. ¶ 57). The Amended Complaint seeks, inter alia, (i) unpaid wages and liquidated damages pursuant to the FLSA, (ii) unpaid wages including minimum wage, overtime pay and spread of hours pay, plus Page 5 prejudgment interest, under the New York Labor Law, and (iii) attorneys' fees and costs. (Am. Compl. Wherefore Clause ¶¶ a, b & d.)

  EVIDENCE ON THE INQUEST AND ANALYSIS

  The Second Circuit has approved the holding of an inquest by affidavit, without an in-person court hearing, "`as long as [the Court has] ensured that there was a basis for the damages specified in the default judgment.'" Transatlantic Marine Claims Agency. Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997) (quoting Fustok v. Conti Commodity Servs., Inc., 873 F.2d 38, 40 (2d Cir. 1989)).*fn3 Here, using affidavits was particularly appropriate because plaintiffs are Chinese-speakers who do not speak English, and the evidence could best be provided in cumulative chart form. (See Dkt. No. 77: Kimerling 12/12/03 Inquest Aff. Exs. A-B.) The Court has reviewed plaintiffs' affidavits ...


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