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Maximo v. 140 Green Laundromat

United States District Court, S.D. New York

July 7, 2015

SOCORRO MAXIMO, individually and on behalf of all other persons similarly situated, Plaintiff,
v.
140 GREEN LAUNDROMAT, et al.,

OPINION AND ORDER

KATHERINE POLK FAILLA, District Judge.

Plaintiff Socorro Maximo brings this action, individually and on behalf of those similarly situated, against 140 Green Laundromat, Inc., 824 Green Laundromat, Inc., Green Laundromat, Inc., and Jae J. Kim (collectively, "Defendants"). Plaintiff alleges violations of provisions of the Fair Labor Standards Act (the "FLSA"), 29 U.S.C. §§ 201-219, and the New York Labor Law (the "NYLL") concerning unpaid or underpaid overtime compensation and various notice requirements. Pending before the Court are Plaintiff's motion to conditionally certify a collective action under FLSA, Defendants' motion to dismiss this case as moot, and Defendants' motion for entry of judgment. Consideration of the instant motions raises the hot-button issue of the effect of making an offer of judgment pursuant to Federal Rule of Civil Procedure 68 to a named plaintiff in a collective action. For the reasons that follow, Defendants' motion for entry of judgment is granted, and all other motions are denied.

BACKGROUND[1]

Plaintiff was employed as a laundress by Defendants for approximately one year. (Compl. ¶¶ 21, 23; Kim Aff. ¶ 3; Pl. Opp. ¶ 3). During this time, Plaintiff alleges, some weeks she worked five days a week, for 40 hours total, and other weeks she worked seven days a week, for 56 hours total. (Compl. ¶ 24). She claims she was paid approximately $7.25 per hour until January 2014; thereafter she was paid $8.00 per hour, always in cash. ( Id. at ¶¶ 25-26). Plaintiff asserts that in the weeks she worked overtime, she was never paid overtime compensation. ( Id. at ¶ 27).

Plaintiff alleges that there are other laundresses who also sometimes worked overtime for Defendants; based on conversations with these individuals, she claims these other laundresses were also not paid overtime compensation. (Maximo Aff. ¶¶ 9-12). In her affidavit in support of her motion for conditional certification, Plaintiff identifies only the first names of ten of these laundresses, while suggesting there may be other, unnamed individuals also similarly situated. ( Id. ). No one other than Plaintiff has opted in to the collective action as of the date of this Opinion. No putative collective action member other than Plaintiff has submitted an affidavit in support of the motion for conditional certification. In addition to the unpaid overtime allegations, Plaintiff further claims that Defendants failed to provide or post required notices or statements under state law, and failed to maintain accurate and sufficient records. ( See Compl. ¶¶ 28-31).

Plaintiff filed the Complaint in this action on August 26, 2014. ( See Dkt. #1). Defendants failed to answer in time, and certificates of default were entered on October 29, 2014. (Dkt. #12-15). On November 4, 2014, at the request of Defendants and on consent of Plaintiff, the Court vacated the certificates (Dkt. #17), and on November 12, 2014, Defendants answered the Complaint (Dkt. #19). On December 17, 2014, the Court set a discovery schedule and a briefing schedule for Plaintiff's proposed motion for conditional collective action certification. (Dkt. #21). On January 9, 2015, Plaintiff filed her motion for conditional collective action certification. (Dkt. #22-24).

On January 22, 2015, Defendants' counsel made a firm settlement proposal in writing to Plaintiff's counsel of $6, 000.00, inclusive of costs and attorney's fees. (Kim Aff. Ex. B). In that offer, Defendants set forth what they characterized as a "grossly overstated" estimate of the overtime due to Plaintiff. ( Id. ).[2] Specifically, they estimated that if Plaintiff worked seven days per week for eight hours each day for half of the yearlong period in which she worked for Defendants (i.e., for 26 weeks) at an $8.00 per hour salary, then she was owed $1, 664.00 in overtime pay. ( Id. ).[3] The $6, 000.00 figure was intended to cover liquidated damages under federal and state law, in addition to costs and attorney's fees. ( Id. ). Plaintiff's counsel did not accept this settlement offer. ( Id. at ¶ 8; see generally Pl. Opp.). On February 2, 2015, the same day they filed their cross-motion to dismiss and for entry of judgment (Dkt. #28-31), Defendants made the same $6, 000.00 offer in the form of a Rule 68 offer of judgment (rather than as a settlement offer, as before), again inclusive of costs and attorney's fees (Kim Aff. Ex. A). Plaintiff did not accept this offer of judgment before it expired under Rule 68.

On February 13, 2015, Plaintiff filed a reply memorandum in support of her motion for conditional certification. (Dkt. #32). On February 17, 2015, she filed an affirmation in opposition to Defendants' motion to dismiss and for entry of judgment. (Dkt. #33). In that opposition, Plaintiff stipulated that she was due $1, 664.00 in overtime pay, but argued that Defendants had largely underestimated the amount she was entitled to under state law. (Pl. Opp. ¶¶ 3-11). On February 26, 2015, Defendants filed a reply affirmation in support of their cross-motion to dismiss and for entry of judgment. (Dkt. #34).[4] In reaction to Plaintiff's stipulation that she was owed $1, 664.00 in overtime pay, Defendants requested that if the Court did not dismiss the action as moot, that it enter judgment against them on Plaintiff's FLSA claims for $3, 328.00 and decline supplemental jurisdiction over Plaintiff's remaining state-law claims. (Def. Reply ¶ 6).

DISCUSSION

A. Applicable Law

In the collective action and class action contexts, the Courts of Appeals are divided as to whether an offer of judgment under Rule 68 for complete relief moots a named plaintiff's claim, and as to the related issue of whether such a plaintiff can continue to litigate on behalf of the putative class.[5] Following the law in this Circuit, however, the way forward in this case is clear: this Court should exercise its discretion to enter judgment against Defendants, thus disposing of the federal claim.

Rule 68 of the Federal Rules of Civil Procedure allows a defendant to make an offer of judgment to a plaintiff. Fed.R.Civ.P. 68. The offer "need not comply with Rule 68" in order to be effective. Doyle v. Midland Credit Mgmt., Inc., 722 F.3d 78, 79, 81 (2d Cir. 2013) (per curiam) (finding oral offer of judgment made during motion hearing before district court sufficient). It must, however, be an offer of judgment, not simply an offer of settlement. Cabala v. Crowley, 736 F.3d 226, 228-29 (2d Cir. 2013) (per curiam).[6]

If the offer tenders less than complete relief, the plaintiff is free to accept or not. If such an offer is accepted, the court must enter judgment accordingly and terminate the case; if such an offer is not accepted, the case proceeds as usual. Hepler v. Abercrombie & Fitch Co., No. 14-4113-cv, ___ F.Appx. ___, 2015 WL 3823883, at *1 (2d Cir. June 22, 2015) (summary order) (citing Tanasi v. New Alliance Bank, 786 F.3d 195, 200-01 (2d Cir. 2015)).

"If the offer tenders complete relief, the court should (absent additional procedural complications) enter judgment pursuant to the terms of that offer, with or without the plaintiff's consent." Hepler, ___ F.Appx. ___, 2015 WL 3823883, at *1; accord Tanasi, 786 F.3d at 200-01; Cabala, 736 F.3d at 228; McCauley v. Trans Union, L.L.C., 402 F.3d 340, 341-42 (2d Cir. 2005). At bottom, a defendant offering judgment for complete relief is submitting to the entry of a default judgment. Hepler, ___ F.Appx. ___, 2015 WL 3823883, at *1 (citing Abrams v. Interco Inc., 719 F.2d 23, 32 (2d Cir. 1983) (Friendly, J.)). "Just as a defendant may end the litigation by ...


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