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Hernandez v. Immortal Rise, Inc.

United States District Court, E.D. New York

March 13, 2014

AMELIA HERNANDEZ, EDITH HERNANDEZ ROJAS, and JUAN EDUARDO HERNANDEZ, individually and on behalf of other persons similarly situated who were employed by IMMORTAL RISE, INC. d/b/a/C-Town and/or AHMAD SALEH or any other entities affiliated with or controlled by IMMORTAL RISE, INC. and/or AHDMAD SALEH, Plaintiffs,
v.
IMMORTAL RISE, INC. d/b/a C-TOWN, AHMAD SALEH, and/or any other entities affiliated with or controlled by IMMORTAL RISE, INC. d/b/a C-Town and/or AHMAD SALEH, Defendants.

MEMORANDUM AND ORDER

ROSLYNN R. MAUSKOPF, District Judge.

This Fair Labor Standards Act ("FLSA") action has a tortured procedural history. Pending before this Court is the Report and Recommendation of Magistrate Judge Lois Bloom (Doc. No. 59) ("R&R"), recommending that plaintiffs be allowed to file a Second Amended Complaint to add as a new defendant Mercury Delivery Service, Inc. ("Mercury"), but denying plaintiffs' request to add Iyad "William" Saleh as a defendant. However, following the issuance of Judge Bloom's R&R, but before Mercury was ever added as a party to this action, Mercury filed for bankruptcy protection in this district, and defendants Immortal Rise and Ahmad Saleh (together, "defendants") requested a stay of the instant action in light of Mercury's pending bankruptcy action. ( See Doc. Nos. 60, 62, 64.)

After a series of filings both here and in the Bankruptcy Court, Mercury purported to "remove" this action to the Bankruptcy Court to join an adversary proceeding filed by Mercury wholly relating to the subject matter of the instant action. Ultimately, the bankruptcy judge (Stong, J.) dismissed the adversary proceeding, and "returned" the instant action to this Court.

Following this convoluted journey through two courts, the instant action is now ready to move forward here, and the next step is for this Court to address (i) the recommendations of Judge Bloom pending without objection, and (ii) defendants' request for a stay of the instant action.

For the reasons that follow, this Court 1) denies plaintiffs' motion to add Iyed "William" Saleh as a defendant as recommended by Judge Bloom; 2) denies plaintiffs' motion to add Mercury as a defendant, a necessary modification of Judge Bloom's recommendation as a result of Mercury's bankruptcy filing, which arose after Judge Bloom issued her report; and 3) denies defendants' request for a stay.

BACKGROUND

I. Plaintiffs' Motion for Leave to File a Proposed Second Amended Complaint

On September 9, 2011, plaintiffs commenced this action against former defendants Enjoy Food Corp. d/b/a C-Town and Maxwell Bristol, alleging violations of the FLSA, 29 U.S.C. § 201 et seq., and New York Labor Law.[1] (Doc. No. 1.)

On January 16, 2012, plaintiffs filed a First Amended Complaint, removing Bristol, and adding defendants Ahmad Saleh and Immortal Rise, Inc. d/b/a C-Town ("Immortal Rise"). (Doc. No. 12.) On May 31, 2012, Judge Bloom issued an order approving the parties' joint proposed Rule 26(f) schedule, which provides that no additional parties may be joined after August 16, 2012 without the Court's leave. (May 31, 2012 Order.)

On September 24, 2012, Judge Bloom issued a Memorandum and Order, pursuant to a referral from the Court, granting plaintiffs' motion for conditional certification of a collective action. (Sept. 24, 2012 Order (Doc. No. 37).) On December 27, 2012, the Court denied defendants' request to set aside the September 24, 2012 Order.

Against this backdrop, on January 9, 2013, plaintiffs sought leave by letter request to file a Second Amended Complaint naming additional defendants Mercury and Iyad "William" Saleh. (Doc. No. 48.) By letter dated January 11, 2013, defendants opposed the addition of these new defendants, and in addition, requested that the Court stay publication of the collective action notice until it resolved plaintiffs' motion to amend. (Doc. No. 49.) On January 14, 2013, Judge Bloom granted defendants' request to stay publication of the collective action notice, but ordered that discovery continue. (January 14, 2013 Order.) On January 22, 2013, plaintiffs formally moved for leave to file the Proposed Second Amended Complaint. That motion was referred to Judge Bloom.

On April 19, 2013, Judge Bloom issued her R&R, recommending that the Court deny plaintiffs' request to add Iyad Saleh as a defendant but grant plaintiffs' request to add Mercury as a defendant. Judge Bloom reasoned that although plaintiffs failed to show good cause to modify the May 31, 2012 Order as to Iyad Saleh, they did show good cause to modify that order as to Mercury. Judge Bloom reminded the parties that pursuant to Fed.R.Civ.P. 72(b), any objections were due within fourteen days of service of the R&R. No party filed an objection. To date, this Court has not adopted or rejected the R&R because of the ensuing events both in the Bankruptcy Court, and here, as described below.

II. Plaintiffs' Motion to Strike Mercury's "Notice of Removal, " and Defendants' Request for a Stay

On May 13, 2013, while the R&R was still pending (and, therefore, the First Amended Complaint remained the operative complaint), Mercury, which has never been a party to this case, petitioned for Chapter 11 Bankruptcy in the United States Bankruptcy Court for the Eastern District of New York. See In re Mercury Delivery Service, Inc., No. 13-42796 (E.D.N.Y. Bankr. 2013). On May 15, 2013, Joseph Labuda, counsel for defendants Immortal Rise and Ahmad Saleh in the instant action, filed a letter with this Court, in which he purported also to represent "defendant" Mercury in the instant case. (Doc. No. 60.)[2] In his letter, Labuda asserted that Mercury's bankruptcy petition subjected the instant action to an automatic stay pursuant to 11 U.S.C. § ...


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