MEMORANDUM OF DECISION AND ORDER
On Mаy 22, 2007, Varsha Mahender Sa-bhnani (‘Yarsha”) and Mahender Murlid-
On December 17, 2007, the jury returned a verdict finding both Defendants guilty of all 12 counts in the indictment.
On June 26, 2008, Varsha Sabhnani was sentenced to a term of imprisonment of 132 months in connection with her conviction. On June 27, 2008, Mahender Sa-bhnani was sentenced to a term of imprisonment of forty months in connection with his conviction.
Presently before the Court is the issue of the amount of restitution owed by the Defendants.
DISCUSSION
I. As To Restitution
A. Mandatory Restitution
18 U.S.C. § 1593 provides for mandatory restitution in cases of peonage, slavery and trafficking. Specifically, the statute provides
(a) Notwithstanding section 3663 or 3663A [18 USCS §§ 3663 and 3663A], and in addition to any other civil or criminal рenalties authorized by law, the court shall order restitution for any offense under this chapter [18 USCS §§ 1581 et seq.].
(b) (1) The order of restitution under this section shall direct the defendant to pay the victim (through the appropriate court mechanism) the full amount of the victim’s losses, as determined by the court under paragraph (3) of this subsection.
(2) An order of restitution under this section shall be issued and enforced in accordance with section 3664 [18 USCS § 3664] in the same manner as an order under section 3663A [18 USCS § 3663A],
(3) As used in this subsection, the term “full amount of the victim’s losses” has the same meaning as provided in section 2259(b)(3) [18 USCS § 2259(b)(3) ] and shall in addition include the greater of the gross income or value to the defendant of the victim’s services or labor or the value of the victim’s labor as guaranteed under the minimum wage and overtime guarantees of the Fair Labor Standards Act (29 U.S.C. 201 et seq.).
18 U.S.C. § 1593. As noted in the statute, victims are еntitled to restitution in the “full amount of the victim’s losses” including the value of their labor or services, pursuant to the Fair Labor Standards Act (“FLSA”).
As noted in 18 U.S.C. § 1593, this Court must also comply with 18 U.S.C. § 3663. Pursuant to that section, the Court must also consider:
(I) the amount of the loss sustained by each victim as a result of the offense; and
(II) the financial resources of the defendant, the financial needs and earning ability of the defendant and the defendant’s dependents, and such other factors as the court deems appropriate.
For purposes of this subsection, the term “full amount of the victim’s losses” includes any costs incurred by the victim for—
(A) medical services relating to physical, psychiatric, or psychological care;
(B) physical and occupational therapy or rehabilitation;
(C) necessary transportation, temporary housing, and child care expenses;
(D) lost income;
(E) attorneys’ fees, as well as other costs incurred; and
(F) any other losses suffered by the victim as a proximate result of the offense.
18 U.S.C. § 2259(b)(3).
B. As To Domestic Workers
The FLSA was amended in 1974 to broaden its coverage and include protection for workers performing domestic services.
Coke v. Long Island Care at Home, Ltd.,
On February 3, 1981, the Department of Labor (“DOL”) issued an opinion letter with regard to whether employees of a group home could be considered to reside at the home, noting “[w]here the facilities offered by the employer provide a homelike environment with private quarters sepаrate from the residents ... we would regard such employees as residing there.” In 2007, a Court in the Eastern District of California cited the DOL’s 1981 opinion letter, again noting that an employee only resides on the employer’s premises if the environment is homelike.
Chao v. Jasmine Hall Care Homes, Inc.,
No. 05-ev-1306,
In the present case, pursuant to the definition set forth by the DOL, the Court finds that Samirah and Enung did not “reside” with the Defendants within the purport of the FLSA. The trial testimony did not reveal a “home-like environment” where Samirah and Enung were provided with private quarters. To the contrary, the environment described throughout the trial was anything but “home-like.” The women usually slept on the floor in various parts of the house. In addition, the proof was clear that they were beaten and tortured and kept in subjugation against their will. Their living in the Sabhnani home could not be properly characterized as “an employee ... in domestic servicе in a household who resides in such household.” Samirah and Enung did not reside in the Sabhnani household, they were kept in confinement. As a result, the exception set forth in 29 U.S.C. § 213(b)(21) would not be applicable.
C. As To Sleep and Meal Periods
Pursuant to 29 CFR § 785.19, “[b]ona fide meal periods are not worktime ... These are rest periods. The employee must be completely relieved from duty for the purposes of eating regular meals ... The employee is not relieved if he is required to perform any duties, whether active or inactive, while eating.” 29 CFR 785.19. As such, employees are not entitled to compensation for bona fide meal times. In addition, 29 CFR § 785.22 ap
[1]f the sleeping period is interrupted by a call to duty, the interruption must be counted as hours worked. If the period is interrupted to such an extent that the employeе cannot get a reasonable night’s sleep, the entire period must be counted. For enforcement purposes, the Divisions have adopted the rule that if the employee cannot get at least 5 hours’ sleep during the scheduled period the entire time is working time.
29 CFR 785.22.
In the present case, Samirah and Enung testified that they were not provided with a sufficient amount of food and on occasion, were actually forced to eat food out of the garbage. The trial testimony of Samirah and Enung is filled with instances of cruelty, torture and deprivation of food and sleep. In addition, as the trial testimony revealed, Deborah Litras, the Ma-hender Sabhnani employee, felt sorry for Samirah and Enung and bought food for them, including donuts and muffins, but she removed the wrappers so the Defendants would not find out. Also, Anthony Pascarella, the Sabhnanis’ gardener, testified that he gave food to Samirah and Enung, including donuts, chicken and bread. None of this trial testimony was refuted. As a result, it is apparent that the women were not provided with bona fide meal periods. As such, the Court finds that no time should be excluded for meal periods. In addition, the victims testified regarding their lack of sleep, as well as duties they were called upon to perform at all hours of the day and night. Specifically, Enung testified that she often worked late in the night and the she woke up at 4 a.m. every day to begin work. The proof at the trial revealed that they were, in fact, on duty 24 hours each day and unable to obtain 5 hours of sleep each night. As a result, the Court finds that the entire days for Samirah and Enung should be considered working time.
In further support of disallowing an exception for meals and lodging, in
Marshall v. Intraworld Commodities Corp.,
No. 79 C 918,
In support of these findings, by the terms of 29 CFR 785.20, “[u]nder certain conditions an employee is considered to be working even though some of h[er] time is spent in sleeping or in certain other activities.” In the present case, it appears from the trial testimony that the victims were on duty at all hours of the day and night. As a result, even though they have slept for some hours each night, pursuant to this section, the Court finds that Samirah and Enung were on duty at all times. Therefore, as stated above, the Court finds that the entire 24 hour days for Samirah and Enung should be considered as working time.
D. As To Liquidated Damages or Double Restitution
As prеviously noted, 18 U.S.C. § 1593, the mandatory restitution statute relevant to the present offenses, provides for the application of the FLSA in order to compensate for “the full amount of the victim’s losses.” As previously noted, 18 U.S.C. § 2259 defines the full amount of the victim’s losses to include medical services, lost income, attorneys’ fees and any other losses suffered by the victim as a proxi
The Court notes that it has discretion to deny this award if an employer shows that he acted in subjective good faith, and had objectively reasonable grounds to believe that his acts or omissions did not violate the FLSA. Id. The employer bears this burden of proving good faith and reasonableness. The employers in this ease, the Sabhnanis, failed to meet this burden. The Court also notes that in Herman, the Second Circuit states that “double damages being the norm and single damаges the exception.” Id.
Although the Defendants contend that the rules in Herman only apply to civil actions, the underlying statute does not support that contention. The statute states that it applies to actions brought “to recover unpaid minimum wages, unpaid overtime compensation, or liquidated damages, under the Fair Labor Standards Act.” 29 U.S.C. § 260.
The applicable criminal restitution statute, 18 U.S.C. § 1593, clearly expressly provides for application of the FLSA to the present restitution award. In the Court’s view, it is reasonable and just to apply this double damages rule, applicable in a civil case, to restitution in a more serious criminal case. Moreover, the double damages provision of the FLSA is intended to compensate the victims for additional losses incurred as a result of the delay in receiving their wages. Considering the statute’s broad application of the FLSA and the compensаtory nature of the double damages award, the Court finds that the restitution award should include double damages, as being within the scope of compensation described by 18 U.S.C. § 1593.
In this regard, the Court notes that, clearly, the Defendants have not demonstrated good faith or reasonable grounds to believe that they were not violating the FLSA. The Defendants did not even come close to compensating Samirah and Enung properly for thе work they performed. In this regard, the Court notes that Mahen-der owns and operates a substantial, profitable and still thriving business, with employees, and, with reasonable certainty, must have had some knowledge of the compensation provisions of the FLSA.
E. The Government’s Calculations
Considering the statutes, case law and trial testimony, the Government’s restitution calculations appear to be reasonable and correct with certain exceptiоns which will be explained. The Government used the applicable minimum wage rates and subtracted the amounts that were actually paid to the victims’ families. The only open questions remain (1) whether the Defendants should provide some compensation for the summer months when they were out of the country, and (2) Varsha’s belated raising of the defense of the statute of limitations.
In the Court’s view, the women should be compensated during thе time that the Defendants were away. The women were taking care of the house and performing daily chores during that period. The Court finds that it would be fair and reasonable to compensate them for 8 hours each day when the Defendants were away,
F. As To The Statute Of Limitations
In the present case, the Defendant Var-sha Sabhnani contends that if the Court applies the provisions of the FLSA to the present case, including the liquidated damages provision, the Court must also apply the statute of limitations set forth in the FLSA. Pursuant to 29 U.S.C. § 255:
Any action commenced on or after the date of the enactment of this Act [enacted May 14, 1947] to enforce any cause of action for unpaid minimum wages, unpaid overtime compensation, or liquidated damages, under the Fair Labor Standards Act of 1938, as amended, the Walsh-Healey Act, or the Bacon-Davis Act—
(a) if the cause of action accrues on or after the date of the enactment of this Act [enacted May 14, 1947]—may be commenced within two years after the cause of action accrued, and every such action shall be forever barred unless commenced within two years after the cause of action accrued, except that a cause of action arising out of a willful violation may be commenced within three years after the cause of aсtion accrued.
29 U.S.C. § 255(a).
“The FLSA generally provides for a two-year statute of limitations on actions to enforce its provisions, but allows a three-year limitations period for ‘a cause of action arising out of a willful violation.’ ”
Herman v. RSR Sec. Servs.,
As the Court is applying the liquidated damages provision of the FLSA, the Court finds no reason why it should not also consider the statute of limitations. However, the Court finds that, with regard to the statute of limitations in the context of a FLSA violation, the thеory of the equitable tolling doctrine, which is read into every federal statute of limitations, is applicable.
In
Kamens v. Summit Stainless, Inc.,
G. As To The Defendants’ Objections
In their sentencing memoranda, the Defendants object to the Government’s restitution calculation, noting that domestic workers are exempt from the FLSA; the victims should not be compensated for meal and sleep periods; and liquidated damages are only applicable in civil cases. Those arguments have previously been addressed by the Court and will not be repeated.
By letter dated July 1, 2008, the attorneys for Varsha Sabhnani raised additional objections to the Gоvernment’s restitution calculation. Varsha requests a detailed factual hearing, with testimony from the victims, regarding the appropriate amount of restitution. She contends that the trial evidence is insufficient to prove that the victims did not have adequate sleeping quarters. She asserts that there is no evidence that they asked to sleep in beds. Similarly, Varsha claims that the victims testified that when Varsha was “still nice” they were given food and that there was no testimony regarding the time that the victims were allotted for meals. In addition, she claims that following their release from the hospital, the victims’ blood test results and other tests were normal demonstrating that they were provided with food. Varsha also reiterates the claim that liquidated damages are only applicable in civil cases.
In opposition, the Government contends that a hearing with testimony from the victims is not necessary. The Government contends that the victims testified in detail for days on direct and cross-examination regarding the food and sleeping arrangements in the Sabhnani home. In fact, the Court recalls that both women were on the stand and subjected to intensive questioning on all the subjects including those involved in this restitution issue, for substantial periods of time. Samirah was on the stand for five days, November 1, 5, 7, 8 and 13, 2007. Her testimony, including intensive and lengthy cross-examination covered 584 pages in the transcript including 252 pages of cross-examination. En-ung was also on the stand for five days, November 20, 21, 26, 27 and 28, 2007. Her testimony covered 498 pages in the Court record including 189 pages of cross-examination.
In
United States v. Maurer,
Similarly, in the Court’s view, the testimony of Samirah and Enung covered substantiаlly all the subjects raised by the Defendants in their present restitution arguments. The two victims need not be further interrogated on the same or similar subjects. The Defendants’ request to produce Samirah and Enung at the restitution hearing is denied.
The Court notes that the problem in the present case is the interplay between a criminal restitution statute and the FLSA. The problem arises from the fact that the criminal rеstitution statute at issue in the present case specifically refers to and includes the provisions of the FLSA. However, according to the restitution statute, restitution should be provided for “the full amount of the victim’s losses.” Pursuant to § 2259(b)(3), “the full amount of the victim’s losses” includes all costs incurred and losses suffered by the victim as a proximate result of the offense. The language contained in the “loss” statute is so broad, it appears to inсlude the liquidated damages in the FLSA, which is intended to compensate victims rather than punish. As a result, an award of liquidated damages is not placing the victims in a better position, they are simply getting the money that they should have received.
Moreover, in the present case, there has been a jury trial of all issues involved in this criminal case. In the Court’s view, Congress did not intend, in the present situation, that this Court hold a second trial on the restitutiоn issues. In addition, the Second Circuit has determined that a jury need not determine restitution.
United States v. Tin Yat Chin,
As such, the Defendants’ request for a jury determination of liquidated damages under the FLSA is denied.
CONCLUSION
In determining this order of restitution the Court did consider (1) the financial resources of the Defendants; (2) the financial needs and earning ability of the Defendants; and (3) the Defendants’ dependents.
In accordance with this decision, the Court finds that restitution payable to the victims, Samirah and Enung, is as follows:
(1) Samirah’s net back pay is equal to $310,371.91;
(2) Samirah is entitled to liquidated damages in the amount of $310,371.91;
(3) Enung’s back pay is equal to $157,901.20; and
(4) Enung is entitled to liquidated damages in the amount of $157,901.20. Annexed as Exhibit A is a chart showing the itemized figures leading to the back pay restitution award for Samirah and Enung.
ORDERED, that Samirah is awarded restitution in the total sum of $620,743.82; and it is further
ORDERED, that Enung is awarded restitution in the total sum of $315,802.40.
SO ORDERED.
EXHIBIT A
[[Image here]]