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Grant v. HER Imports NY, LLC

United States District Court, E.D. New York

March 31, 2018

LUBLEEJOY GRANT, Plaintiff,
v.
HER IMPORTS NY, LLC, HER IMPORTS LLC, HER HOLDING, INC., and EZJR, INC. Defendants.

          MEMORANDUM & ORDER ADOPTING REPORT & RECOMMENDATION

          DORA L. IRIZARRY Chief Judge

         Before the Court are HER Holding, Inc.'s (“HER Holding”) and EZJR, Inc.'s (“EZJR” and together with HER Holding, “Moving Defendants”) Objections to the Report and Recommendation (“R&R”) issued by the Honorable Lois Bloom, United States Magistrate Judge, on February 16, 2018 (“Objections”), recommending that: (i) Moving Defendants' motion for summary judgment (“Defendants' Motion” or “Def. Mot.”) be denied; and (ii) Lubleejoy Grant's (“Plaintiff”) motion for summary judgment (“Plaintiff's Cross-Motion” or “Pl. Cross-Mot.”) be granted, in part, and denied, in part. For the reasons set forth below, the R&R is adopted in its entirety.

         BACKGROUND[1]

         On September 1, 2015, Plaintiff initiated this action alleging that Defendants failed to compensate her for the hours that she worked as required under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., and the New York Labor Law (“NYLL”), N.Y. Lab. Law § 190 et seq. and § 650 et seq. (Compl., Dkt. Entry No. 1.) Defendants HER Imports NY, LLC and HER Imports LLC (collectively “HER Imports”) defaulted in this action. (See Clerk's Entry of Default, Dkt. Entry Nos. 49 and 50, respectively.) While the Clerk entered the Notation of Default, Plaintiff never moved for default judgment against these entities.

         On May 18, 2017, Moving Defendants filed the instant motion for summary judgment, contending that neither entity employed Plaintiff. (Def. Mot., Dkt. Entry Nos. 56-61.) Plaintiff cross-moved for summary judgment on the grounds that: (i) Plaintiff was an employee, not an independent contractor, and (ii) Moving Defendants were Plaintiff's employers under multiple theories. (Pl. Cross-Mot., Dkt. Entry Nos. 62-71.)

         On October 16, 2017, this Court referred Moving Defendants' Motion and Plaintiff's Cross-Motion to Magistrate Judge Bloom for the issuance of an R&R. On February 16, 2018, the magistrate judge issued the R&R, recommending that Moving Defendants' Motion be denied. (R&R at 37.) The magistrate judge recommended further that Plaintiff's Cross-Motion be granted “on her claims that defendant HER Holding operated as a single integrated enterprise with HER Imports and that EZJR operated as a joint employer with HER Imports and HER Holding under the FLSA” and that the remainder of the motion be denied. (Id.) The magistrate judge found that genuine issues of material fact existed as to “whether plaintiff qualifies as an ‘employee' under the law, or was an ‘independent contractor'.” (Id. at 3.)

         With respect to whether HER Holding and EZJR qualify as “employers”, the magistrate judge made the following findings of fact and conclusions of law: (i) the record does not support a finding that EZJR is a joint employer under the formal control test articulated in Carter v. Dutchess Community College, 735 F.2d 8, 12 (2d Cir. 1984) (R&R at 26-27); (ii) however, under Zheng v. Liberty Apparel Co. Inc., 355 F.3d 61, 66 (2d Cir. 2003), EZJR operated as a joint employer along with HER Imports and HER Holding functionally controlling those originally hired by HER Imports (Id. at 27-30); and (iii) that, under Bautista v. Beyond Thai Kitchen, Inc., 2015 WL 5459737, at *3 (S.D.N.Y. Sept. 17, 2015), EZJR was a substantial continuity of HER Imports (Id. at 30-35). As to the threshold question of whether plaintiff qualified as an employee under the FLSA and NYLL, the magistrate judge found that the record is replete with disputed facts and, therefore, summary judgment should be denied. (R&R at 36-37.)

         On March 2, 2018, Moving Defendants timely objected to all aspects of the R&R that recommended denial of their motion. (“Objections”, Dkt. Entry No. 75.) Specifically, the Objections challenge the magistrate judge's findings that: (1) that HER Holding is a single integrated employer with HER Imports; and (2) that EZJR is a joint employer with HER Imports. (Objections at 2.) On March 30, 2018, after having been granted an extension by the Court, Plaintiff timely opposed Moving Defendants' objections. (Opp. to the Objections, Dkt. Entry No. 77.)

         DISCUSSION

         When a party objects to an R&R, a district judge must make a de novo determination as to those portions of the R&R to which a party objects. See Fed. R. Civ. P. 72(b)(3); United States v. Male Juvenile, 121 F.3d 34, 38 (2d Cir. 1997). Pursuant to the standard often articulated by the district courts of this Circuit, “[i]f a party simply relitigates his original arguments, the Court reviews the Report and Recommendation only for clear error.” Antrobus v. New York City Dep't of Sanitation, 2016 WL 5390120, at * 1 (E.D.N.Y. Sept. 26, 2016) (citations and quotation marks omitted); see also Rolle v. Educ. Bus Transp., Inc., 2014 WL 4662267, at *1 (E.D.N.Y. Sept. 17, 2014) (“[A] rehashing of the same arguments set forth in the original papers . . . would reduce the magistrate's work to something akin to a meaningless dress rehearsal.”) (citations and internal quotation marks omitted). On the other hand, the Second Circuit Court of Appeals has suggested that a clear error review may not be appropriate “where arguably ‘the only way for a party to raise . . . arguments is to reiterate them.'” Moss v. Colvin, 845 F.3d 516, 520 n.2 (2d Cir. 2017) (quoting Watson v. Geithner, 2013 WL 5441748, at *2 (S.D.N.Y. Sept. 27, 2013) (alteration added in Moss; other alterations from Moss omitted). Nonetheless, a court will not “ordinarily . . . consider arguments, case law and/or evidentiary material which could have been, but [were] not, presented to the magistrate judge in the first instance.” Santiago v. City of New York, 2016 WL 5395837, at *1 (E.D.N.Y. Sept. 26, 2016) (internal citation and quotation marks omitted). After its review, the district court then may “accept, reject, or modify the recommended disposition; receive further evidence; or return the matter to the magistrate judge with instructions.” Fed.R.Civ.P. 72(b)(3); see also 28 U.S.C. § 636(b)(1).

         The Court has reviewed the R&R de novo with respect to Defendant's objections, and has reviewed the remainder of the R&R for clear error. For the reasons set forth below, the Court adopts the thorough and well reasoned R&R in its entirety.

         1. The Magistrate Judge Correctly Found HER Holding is a Single Integrated Enterprise with HER Imports

         First, Moving Defendants challenge the magistrate judge's finding that HER Holding was a single integrated enterprise with HER Imports and, therefore, if Plaintiff is found to have been an employee (rather than an independent contractor), HER Holding may be held liable. (Objections at 11.) Having reviewed these findings in detail, the Court adopts the magistrate judge's conclusion.

         The magistrate judge considered, and properly rejected, Moving Defendants' argument that HER Holding could not be an employer of Plaintiff because it was formed the same month that Plaintiff resigned. (R&R at 21.) The magistrate judge rejected this contention because it ignores the economic reality that HER Holding is an extension of HER Imports pursuant to an assignment. (Id.) As the magistrate judge noted, “HER Holding was incorporated for the sole purpose of receiving royalties that EZJR was ...


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