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Balverde v. Lunella Ristorante, Inc.

United States District Court, S.D. New York

May 10, 2017

JOSE BALVERDE, individually and on behalf of all others similarly situated, Plaintiffs,
LUNELLA RISTORANTE, INC. d/b/a LUNELLA RISTORANTE, and GAETANA RUSSO, jointly and severally, Defendants.


          RAMOS, D.J.

         Named Plaintiff Jose Balverde (“Balverde”) and the opt-in Plaintiffs (collectively, with the putative class members, the “Plaintiffs”) bring this action under the Fair Labor Standards Act (“FLSA”) and New York Labor Law (“NYLL”). Complaint (“Compl.”) (Doc. 1). Plaintiffs allege that they and all other similarly situated employees are entitled to wrongly withheld gratuities, as well as minimum wage, overtime, and spread-of-hours pay from a Manhattan restaurant operating under the name Lunella Ristorante. Id. Before the Court are two motions: (1) Plaintiffs' Motion to Amend/Correct the Complaint, Doc. 57; and (2) Plaintiffs' Motion for Class Certification, Doc. 60. For the reasons stated below, the motion to amend or correct the complaint is GRANTED, and the motion to certify the class is GRANTED in part and DENIED in part.


         Plaintiffs bring this suit against corporate Defendant Lunella Ristorante, Inc. d/b/a Lunella Ristorante (“Lunella”), and individual Defendant Gaetana Russo (“G. Russo, ” and together with Lunella, “Defendants”). Lunella is a restaurant located on Mulberry Street in Little Italy, New York City. Defendant G. Russo and her daughter, Rossana Russo, (“R. Russo”) jointly own Lunella. Deposition of Gaetana Russo (“G. Russo Dep.”) (Doc. 62-9) at 9:12-9:14. Goran Segota has been the manager of Lunella since 2006, where he supervises employees, records the hours worked by hourly employees, and sends the hours worked to Defendants' accountant to process payroll. Deposition of Goran Segota (“Segota Dep.”) (Doc. 62-8) at 8:6- 8:9; 11:2-11:5, 15:11-15:22.

         From July 15, 2009 until 2015, Defendants employed at least forty-nine hourly employees as waiters, bussers, runners, bartenders, kitchen employees, and dishwashers. Declaration of Brent E. Pelton (“Pelton Declr.”) (Doc. 62-6) (List of Employees).[2] Defendants have not provided any records showing employees who worked for Defendants in 2016 and 2017. See Pelton Decl. ¶ 15. Additionally, Plaintiffs aver that “[i]t is likely that additional employees, not included on Defendants' lists, worked at Lunella” because Segota mentioned two employees who did not have tax ID numbers and confirmed that one of them was not paid on the books. See Segota Dep. at 105:4-105:21, 147:9-147:20.

         Balverde worked for Defendants as a waiter and bartender from approximately December 2013 through May 2015. Deposition of Jose Balverde (“Balverde Dep.”) (Doc. 62-1) at 15:25- 16:4, 17:7-17:9. Opt-in plaintiff Carlos Garcia (“Garcia”) worked for Defendants as a waiter from approximately February 2013 until around the end of summer 2014. Deposition of Carlos Garcia (“Garcia Dep.”) (Doc. 62-2) at 15:17-15:22, 39:21-39:23. Opt-in Plaintiff Jorge Molina (“Molina”) worked for Defendants as a waiter from approximately 2012 through October 2012, and again from approximately February 2014 through November 2014. Deposition of Jorge Molina (“Molina Dep.”) (Doc. 62-4) at 18:4-18:6; 19:8-19:11; 21:21-21:24. Opt-in Plaintiff Angel Sevilla (“Sevilla”) worked for Defendants as a runner from approximately December 2013 through March 2014. Deposition of Angel Sevilla (“Sevilla Dep.”) (Doc. 62-3) at 12:23-13:2; 27:15-27:18). Opt-in Plaintiff Sadik Djecbitric (“Djecbitric”) worked for Defendants as a waiter for a couple of weeks in June 2015. Deposition of Sadik Djecbitric (“Djecbitric Dep.”) (Doc. 62-5) at 14:4-14:9.


         Plaintiff commenced the instant action on July 15, 2015. Compl. Defendants Lunella and G. Russo filed an Answer on August 10, 2015. Docs. 12, 13.[3]

         In the Complaint, Balverde alleges seven (7) causes of action. Counts I and II allege a FLSA collective action claim for unpaid minimum wage and unpaid overtime, respectively, on behalf of all hourly employees. Compl. ¶¶ 3, 17, 55-62. Four NYLL claims (Counts III-VI) are also brought on behalf of all hourly employees, and allege:

Count III: Failure to pay minimum wage for all hours worked in violation of §§ 650, et seq.;[4]
Count IV: Failure to pay overtime for hours worked in excess of forty per week, in violation of §§ 650, et seq.;[5]
Count V: Failure to pay “spread of hours” premiums for days in which the hourly employees' work day lasted ten or more hours, in violation of N.Y. Comp. Code R. & Regs. tit. 12, §§ 137-1.7 (2010), 146-1.6 (2012); and Count VI: Failure to provide wage notices on the date of hire or by February 1 of each year in violation of NYLL, Article 6, § 191.

Id. ¶¶ 63-74. These four NYLL claims on behalf of the Unpaid Wage Class are referred to herein as the “Unpaid Wage Claims.”

         The seventh NYLL claim is brought on behalf of an “Unpaid Tips Subclass” consisting of all tip-eligible employees (wait staff, bussers, runners and bartenders). This claim alleges that Defendants unlawfully withheld gratuities from their tip-eligible employees, in violation of § 196-d (the “Unpaid Tips Claim”). Id. ¶¶ 75-77.

         On November 19, 2015, Plaintiffs filed a motion to conditionally certify a FLSA collective action. Pursuant to Plaintiffs' motion, the Court conditionally certified the FLSA minimum wage and overtime claims as a collective action and authorized notice to be issued to all current and former servers, bartenders, and runners who worked at Lunella at any time from July 15, 2012 through May 11, 2016. Doc. 37 at 10.[6] Four individuals have exercised their rights to join the action by filing consent to become a party plaintiff forms with the Court. See Docs. 19 (Garcia), 40 (Molina), 45 (Sevilla), 46 (Djecbitric).

         The parties have now exchanged discovery. See Memorandum of Law in Support of Plaintiffs Motion for Class Certificaton (“Pls.' Mem. L.”) (Doc. 61) at 4. Defendants have deposed all Plaintiffs and Plaintiffs have deposed Defendant G. Russo, Lunella's manager- Segota, R. Russo, and accountant Stuart Kosoff (“Kosoff”). Id.


         With respect to their class certification motion, Plaintiffs seek an order:

1) certifying Plaintiffs' New York Labor Law (“NYLL”) claims for unpaid minimum wages, overtime wages, unpaid spread-of-hours and failure to provide wage notice, (Counts III, IV, V, VI) as a Rule 23(b)(3) class action on behalf of a class defined as: “all hourly employees who worked for Lunella Ristorante, Inc. at any time from July 15, 2009 through the present” (the “Unpaid Wage Class”);
(2) certifying Plaintiffs' NYLL claims for unlawfully withheld gratuities (Count VII) as a Rule 23(b)(3) class action on behalf of a tipped subclass defined as: “all waiters, bussers, runners and bartenders who worked for Lunella Ristorante, Inc. at any time from July 15, 2009 through the present” (the “Unpaid Tips Subclass”);
(3) appointing Named Plaintiff Jose Balverde as class representative and counsel for Plaintiffs as class counsel;
(4) approving the class notice attached to the declaration of Brent E. Pelton, Pelton Decl. at Ex. 11; and
(5) directing Defendants to furnish in electronically readable form the names and last known addresses of all members of the Class so that Plaintiffs can issue class notice.

Pls.' Mem. L. at 1-2.

         A. Legal Standard

         One or more members of a class are permitted to sue on behalf of the class if:

(1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class.

Fed. R. Civ. P. 23(a). “Rule 23(a) ensures that the named plaintiffs are appropriate representatives of the class whose claims they wish to litigate.” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 349 (2011). The four requirements “effectively limit the class claims to those fairly encompassed by the named plaintiff's claims.” Id. (internal quotation marks omitted). “The party seeking class certification bears the burden of establishing by a preponderance of the evidence that each of Rule 23's requirements has been met.” Myers v. Hertz Corp., 624 F.3d 537, 547 (2d Cir. 2010).

         The putative class must also satisfy at least one of the three requirements listed in Rule 23(b). Here, Plaintiffs seek class certification under Rule 23(b)(3), see Pls.' Mem. L. at 10, which requires them to demonstrate, in addition to the prerequisites of Rule 23(a), that “the questions of law or fact common to class members predominate over any questions affecting only individual members, ” and that a class action would be “superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed.R.Civ.P. 23(b)(3).

         A party seeking class certification must affirmatively demonstrate his compliance with Rule 23. Wal-Mart, 564 U.S. at 350. In order words, the Rule “does not set forth a mere pleading standard.” Id. A district court must undertake a “rigorous analysis” in order to determine whether the requirements have been met. Comcast Corp. v. Behrend, 133 S.Ct. 1426, 1432 (2013). In making such determinations, the court “should not assess any aspect of the merits unrelated to a Rule 23 requirement.” Shahriar v. Smith & Wollensky Rest. Grp., Inc., 659 F.3d 234, 251 (2d Cir. 2011) (quoting In re Initial Pub. Offering Sec. Litig., 471 F.3d 24, 41 (2d Cir. 2006)). However, the court's analysis will inevitably “entail some overlap with the merits of the plaintiff's underlying claim.” Wal-Mart, 564 U.S. at 351. On a Rule 23 motion, “the ultimate question is not whether the plaintiffs . . . will prevail on the merits but rather whether they have met the requirements of Rule 23.” Gortat v. Capala Bros., 257 F.R.D. 353, 362 (E.D.N.Y. 2009). Although the Court must resolve factual disputes relevant to satisfying each Rule 23 requirement, “any factual determinations made at the certification stage are not binding on a subsequent fact-finder, even the certifying court.” Flores v. Anjost Corp., 284 F.R.D. 112, 122 (S.D.N.Y. 2012) (citing In re Initial Pub. Offering Sec. Litig., 471 F.3d at 41). When considering a motion for class certification, the court must accept the allegations in the complaint as true. Meyer v. United States Tennis Ass'n, 297 F.R.D. 75, 82 (S.D.N.Y. 2013).

         Plaintiffs seek to certify their Unpaid Wage Class on behalf of all hourly employees of Defendants who are or were employed at any time during the six year NYLL statutory period. This includes both front of house employees (such as bussers and servers) and back of house employees (such as kitchen staff). Plaintiffs further seek to certify their Unpaid Tips Class on behalf of all tip-eligible employees of Defendants who are or were employed at any time during the six year statutory period. Defendants argue that Plaintiffs have failed to adequately allege: (1) numerosity, Defs.' Mem. L at 21-22; (2) commonality, id. at 7-20; (3) typicality, id.; and (4) adequacy of representation, id. at 2-6. Defendants also argue that the class should not be certified with respect to back of the house kitchen employees. Id. at 23.

         B. Analysis

         1. Kitchen Employees

         As a threshold matter, the Court considers whether the Unpaid Wage Class should be certified with respect to back of the house kitchen employees. Plaintiffs previously made an application for conditional class certification pursuant to the FLSA. Doc. 23. In that application they sought-as they do again in the instant motion-to certify a class involving both front of the house (servers, runners, bussers, and bartenders) and back of the house employees. Doc. 24 at 11-12. The Court held:

[T]he Court finds that Plaintiffs have failed to muster a showing of a common policy or practice that applied to back of the house employees. The only allegations suggesting that Defendants' failure to pay overtime premiums extended to back of the house employees are Plaintiffs' statements that this was “a corporate policy that applied to all non-management employees, ” and that they “overheard conversations” amongst kitchen workers and dishwashers. These unsupported assertions and conclusory allegations are insufficient to conditionally certify a class . . . Ultimately, Plaintiffs' complaint and affidavits do not contain factual allegations specific to other types of employees besides servers, bartenders, and runners, such as “the specific hours worked by, or the amounts paid to, other employees. Therefore, Plaintiffs' motion for conditional certification is granted, but given the information presently before the Court, the class shall only include servers, bartenders, and runners.

Doc. 37 at 8. Defendants contend that Plaintiffs have submitted no additional substantive information that should alter the Court's determination with regards to back of the house employees for purposes of the instant motion. Defs.' Mem. L at 22. Plaintiffs argue that the pay policies are consistent as to all hourly employees-including both tipped and kitchen employees.

         Specifically, Plaintiffs aver that the deposition testimony of the Plaintiffs, the payroll records of Defendants, and Defendants' testimony confirm Defendants' corporate policy of paying all hourly employees (including tipped and kitchen employees) ...

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