Jian Long Li v. Li Qin Zhao
35 F. Supp. 3d 300
E.D.N.Y2014Background
- China House Take Out was a small family-run restaurant in Westbury, NY; owners Zhao and Yuen ran the business and handled most operations.
- The restaurant reported about $70,901 in gross sales for 2010 and approximately $73,176 annualized for 2011 on its tax returns, but bank deposits and supplier invoices suggested higher activity.
- Plaintiff Jian Long Li worked as a delivery driver from June 4, 2010 to January 28, 2011, using his own car and phone; he alleges ~11-hour shifts six days a week and claimed unpaid overtime.
- Defendants moved for summary judgment arguing Li was not covered by the FLSA because (a) the enterprise’s annual gross volume was well below the $500,000 threshold for enterprise coverage, and (b) Li’s work was purely intrastate and did not satisfy individual coverage.
- The district court found the documentary record (tax returns and bank statements) did not create a triable issue that China House met the $500,000 enterprise threshold, and that Li’s use of a car, gasoline, and a cellphone did not establish individual interstate commerce coverage.
- The court granted summary judgment dismissing the FLSA claim with prejudice and declined supplemental jurisdiction over state-law claims (dismissed without prejudice).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enterprise coverage under 29 U.S.C. § 203(s) ($500,000 threshold) | China House underreported gross sales; other evidence (bank deposits, invoices) show higher receipts and could push gross sales over $500,000 | Tax returns and bank records show gross sales far below $500,000; no concrete evidence raises a triable issue | No enterprise coverage; court grants summary judgment for defendants |
| Individual coverage (engaged in commerce or production for commerce) | Li regularly used an out-of-state manufactured car, bought gas from national chains, and used a cellular phone — these connect his work to interstate commerce | Li made only intrastate deliveries to local customers and there is no evidence his tasks involved interstate commerce or interstate communications | No individual coverage; these activities are only tangentially related to interstate commerce |
| Sufficiency of plaintiff’s evidence to defeat summary judgment | Plaintiff contends tax returns are not credible and proffers alternative inferences about business revenue | Defendants point out absence of concrete, affirmative evidence to establish $500,000 in annual gross sales | Plaintiff failed to present specific admissible evidence; summary judgment appropriate |
| Supplemental jurisdiction over state-law claims after dismissal of federal claim | N/A — plaintiff hoped to keep state claims in federal court | Defendants sought dismissal of federal claim; court to consider whether to retain state claims | Court declines to exercise supplemental jurisdiction; state claims dismissed without prejudice |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burden allocation)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (standard for genuine issue of material fact)
- Salahuddin v. Goord, 467 F.3d 263 (summary judgment principles in Second Circuit)
- Tony & Susan Alamo Found. v. Secretary of Labor, 471 U.S. 290 (FLSA coverage principles)
- Jacobs v. New York Foundling Hospital, 577 F.3d 93 (enterprise and individual coverage discussion)
- Arbaugh v. Y & H Corp., 546 U.S. 500 (treatment of statutory coverage limits)
- McLeod v. Threlkeld, 319 U.S. 491 (distinguishing activities that merely affect interstate commerce)
- Schoonejongen v. Curtiss-Wright Corp., 143 F.3d 120 (when the record points in one direction on summary judgment)
- Thorne v. All Restoration Services, Inc., 448 F.3d 1264 (local purchases from national chains do not create individual FLSA coverage)