DEFENDANTS MEMORANDUM IN SUPPORT OF MOTION TO DISMISS AMENDED COMPLAINT

STATE OF NEW YORK SUPREME COURT : COUNTY OF KINGS DJUMABAY SHOTOMIROV, individually and on behalf of all others similarly situated, Plaintiff(s), Index No. 522567/2016 Assigned Justice: Hon. Edgar G. Walker v. HOME HEALTH CARE SERVICES OF NEW YORK INC. and AGNES SHEMIA, Defendants. DEFENDANTS MEMORANDUM IN SUPPORT OF MOTION TO DISMISS AMENDED COMPLAINT HODGSON RUSS LLP Attorneys for Defendants Paul I. Perlman Peter C. Godfrey Sarah N. Miller The Guaranty Building 140 Pearl Street, Suite 100 Buffalo, New York 14202-4040 716.856.4000 1 of 16

TABLE OF CONTENTS PAGE PRELIMINARY STATEMENT... 1 PROCEDURAL AND FACTUAL BACKGROUND... 1 ARGUMENT... 3 POINT I. PLAINTIFF S FIRST CLAIM FOR RELIEF SHOULD BE DISMISSED BECAUSE IT IS BARRED BY CPLR 901(B)... 3 A. Plaintiff Cannot Maintain a Class Action to Recover Liquidated Damages or Other Penalties on Behalf of the Putative Class... 4 B. Plaintiff s Class Action Claim Is Barred by CPLR 901(b) Because Plaintiff Has Not Waived The Right To Recover Liquidated Damages or Other Penalties... 6 POINT II. PLAINTIFF HAS NOT STATED A CLAIM UNDER NYLL SECTION 195(1)... 8 A. Plaintiff Fails To Allege That HCS Did Not Provide Wage Notices At the Time Of Hire... 8 B. There is No Private Right of Action for an Alleged Violation of the Annual Notice Provisions in NYLL Section 195(1)... 9 POINT III. PLAINTIFFS CLAIMS MUST BE DISMISSED WITH PREJUDICE... 10 CONCLUSION... 11 i 2 of 16

TABLE OF AUTHORITIES Page(s) Federal Cases De la Cruz v. Gill Corn Farms, Inc., 2005 WL 5419056 (N.D.N.Y. Jan. 25, 2005)... 5 Guan Ming Lin v. Benihana N.Y. Corp., 2012 WL 7620734 (S.D.N.Y. Oct. 23, 2012)... 8, 10 Hinckley v. Seagate Hospitality Grp., LLC, 2016 WL 6524314 (W.D.N.Y. Nov. 3, 2016)... 10 Klein v. Ryan Beck Holdings, Inc., 2007 WL 2059828 (S.D.N.Y. July 13, 2007)... 7 Kone v. Joy Const. Corp., 2016 WL 866349 (S.D.N.Y. Mar. 3, 2016)... 9 Smellie v. Mount Sinai Hosp., 2004 WL 2725124 (S.D.N.Y. Nov. 29, 2004)... 7 Yuquilema v. Manhattan s Hero Corp., 2014 WL 4207106 (S.D.N.Y. Aug. 26, 2014)... 9, 10 State Cases Ballard v. Cmty. Home Care Referral Serv., Inc., 264 A.D.2d 747 (2d Dep t 1999)... 5 Borden v. 400 East 55th Street Assocs., L.P., 24 N.Y.3d 382 (2014)... 6 Carter v. Frito-Lay, Inc., 74 A.D.2d 550 (1st Dep t 1980)... 5, 6 Cox v. Microsoft Corp., 8 A.D.3d 39 (1st Dep t 2004)... 5 Downing v. First Lenox Terrace Assocs., 107 A.D.3d 86 (1st Dep t 2013)... 7 ii 3 of 16

TABLE OF AUTHORITIES - cont d PAGE Paltre v. General Motors Corp., 26 A.D.3d 481 (2d Dep t 2006)... 5 Picard v. Bigsbee Enterprises, Inc., 44 Misc. 3d 1214(A) (N.Y. Sup. Ct. Albany Cnty. 2014)... 4 Ridge Meadows Homeowners Ass n v. Tara Dev. Co., 242 A.D.2d 947 (4th Dep t 1997)... 5 Super Glue Corp. v. Avid Rent A Car Sys., Inc., 132 A.D.2d 604 (2d Dep t 1987)... 7 Thomas v. Meyers Assocs., L.P., 39 Misc. 3d 1217(A) (N.Y. Sup. Ct. N.Y. Cnty. 2013)... 4 State Statutes N.Y. LAB. LAW 195... passim N.Y. LAB. LAW 198... passim Rules CPLR 901(b)... passim CPLR 3211(a)(7)... 1, 11 iii 4 of 16

Preliminary Statement Defendants Home Health Care Services of New York Inc. and Agnes Shemia (collectively, HCS ) submit this memorandum in support of their motion to dismiss plaintiff Djumabay Shotomirov s ( plaintiff ) amended class action complaint with prejudice on grounds that it fails to state a claim under CPLR 3211(a)(7). Procedural and Factual Background Plaintiff commenced this action against defendant Home Health Care Services of New York Inc. on or about December 20, 2016 for alleged overtime wages owed under the New York Labor Law ( NYLL ) and damages for alleged violations of the notice and pay statement provisions of the NYLL. 1 Home Health Care Services of New York Inc. moved to dismiss the original complaint on February 15, 2017, pursuant to CPLR 3211(a)(7), on grounds that: (1) the class action claims (the First and Second Claims for Relief) were barred by CPLR 901(b) because they impermissibly sought liquidated damages and other penalties under the New York Labor Law; and (2) the Second Claim for Relief failed to state a claim under NYLL 195(1). 2 Plaintiff filed an Amended Class Action Complaint on February 17, 2017. 3 The amended complaint contains the same two claims alleged in the original complaint: (1) failure to 1 See Affirmation of Paul I. Perlman, dated March 9, 2017 ( Perlman Aff. ), Ex. A (original complaint). 2 See generally Docket No. 5 (HCS s Memorandum of Law In Support of Motion To Dismiss Complaint, dated February 15, 2017). 3 See Perlman Aff., Ex. B (Amended Class Action Complaint) (hereinafter referred to as amended complaint or AC ). Any reference to the allegations in the amended complaint are made only for the purpose of providing the Court with background for the arguments in this motion. HCS neither admits nor denies the truth of any referenced allegation or plaintiff s characterization of the facts of this case, and expressly reserves the right to raise any and all defenses in its answer to the complaint should this motion be denied. 5 of 16

pay overtime wages under the NYLL (First Claim For Relief) and; (2) notice violations and wage statement violations under NYLL 195 (Second Claim For Relief). See AC 33-40. The Amended Complaint also adds Agnes Shemia as an individual defendant. See generally id. 4 Plaintiff s First Claim for Relief in the amended complaint is for HCS s alleged failure to pay overtime wages under the NYLL. AC 33-36. Plaintiff brings this claim under CPLR Article 9 on behalf of himself and all individuals employed in New York State by HCS as Home Health Aides and/or Home Attendants at any time during the six years prior to the filing of the original complaint (the putative class members ). AC 23; see also id. 24-36. Paragraph 36 of the amended complaint states that plaintiff seeks, on behalf of himself and the putative class members, damages in the amount of their respective unpaid overtime compensation, prejudgment interest, attorneys fees and costs, pursuant to NYLL, and such other legal and equitable relief. Id. 36 (emphasis added). Paragraph 23 of the amended complaint states that plaintiff seeks to recover unpaid overtime pay and other damages on behalf of the putative class members. Id. 23 (emphasis added). Similarly, the amended complaint s prayer for relief seeks an award of damages including unpaid overtime wages and other and further legal... relief. See id. at page 10, Nos. 3 and 7 (emphasis added). Although the plaintiff does not expressly seek liquated damages on his First Claim For Relief (the class action claim), the amended complaint does not expressly limit the damages sought to actual damages, nor does the amended complaint state that plaintiff has 4 HCS notes that the amended complaint does not allege that this Court has personal jurisdiction over Ms. Shemia. 2 6 of 16

waived liquidated damages or other penalties on behalf of himself or the putative class members. See generally id. Plaintiff s Second Claim For Relief in the amended complaint is for HCS alleged violations of various notice and wage statement provisions in NYLL section 195. See id. 21-22, 37-40. Plaintiff brings the Second Claim For Relief solely on his own behalf, and not on behalf of a putative class. See id. 21-22, 37-40; see also id. at page 10 (prayer for relief Nos. 8-9). Under the Second Claim For Relief, plaintiff seeks penalties for HCS alleged violation of NYLL 195(3) equal to $100 for each workweek on or after April 9, 2011, on which the violations occurred... or a total of $2,500 as provided for under NYLL 198(1-d). AC 40. Plaintiff also seeks penalties for HCS alleged violation of NYLL 195(1) equal to $50 dollars for each workweek in which the violations occurred... or a total of $2,500 as provided for in NYLL 198(1-b), in addition to reasonable attorneys fees, costs, injunctive and declaratory relief. Id. Argument POINT I. PLAINTIFF S FIRST CLAIM FOR RELIEF SHOULD BE DISMISSED BECAUSE IT IS BARRED BY CPLR 901(b) Plaintiff cannot maintain his First Claim for Relief, which is brought as a class action claim, because plaintiff cannot maintain a class action to recover liquidated damages or other penalties under the NYLL on behalf of the putative class, and plaintiff has not properly waived the right to recover liquidated damages or other penalties on behalf of himself or the putative class. 3 7 of 16

A. Plaintiff Cannot Maintain a Class Action to Recover Liquidated Damages or Other Penalties on Behalf of the Putative Class CPLR 901(b) prohibits the use of a class action to pursue claims under a statute that provides for recovery of a penalty or a minimum measure of recovery created or imposed by statute, unless the statute expressly authorizes such claims to be brought as a class action. Specifically, CPLR 901(b) states that [u]nless a statute creating or imposing a penalty, or a minimum measure of recovery specifically authorizes the recovery thereof in a class action, an action to recover a penalty, or minimum measure of recovery created or imposed by statute may not be maintained as a class action. CPLR 901(b) (McKinney). New York Labor Law 198(1-a) provides for the recovery of, among other things, liquidated damages penalties in any action upon a wage claim in which an employee prevails. N.Y. LAB. LAW 198 (1-a) (McKinney). 5 See also Picard v. Bigsbee Enterprises, Inc., 44 Misc. 3d 1214(A), at *2 (N.Y. Sup. Ct. Albany Cnty. 2014) (recognizing that the liquidated damages available under Labor Law 198(1-a) represent a penalty within the meaning of CPLR 901(b)); Thomas v. Meyers Assocs., L.P., 39 Misc. 3d 1217(A), at *1 (N.Y. Sup. Ct. N.Y. Cnty. 2013) (recognizing that liquidated damages under the NYLL constitute a statutory penalty). 5 NYLL 198(1-a) states in part, [i]n any action... upon a wage claim... in which the employee prevails, the court shall allow such employee to recover the full amount of any underpayment, all reasonable attorney s fees, prejudgment interest as required under the civil practice law and rules, and, unless the employer proves a good faith basis to believe that its underpayment of wages was in compliance with the law, an additional amount as liquidated damages equal to one hundred percent of the total amount of the wages found to be due.... N.Y. LAB. LAW 198 (1-a) (emphasis added). 4 8 of 16

However, NYLL 198 does not specifically authorize the plaintiff to bring class action claims to recover these penalties. See N.Y. LAB. LAW 198; Carter v. Frito-Lay, Inc., 74 A.D.2d 550, 550 (1st Dep t 1980) (holding that NYLL 198(1-a) provides for liquidated damages and does not contain the necessary clause allowing these damages to be recovered in a class action ) aff d, 52 N.Y.2d 994 (1981); De la Cruz v. Gill Corn Farms, Inc., 2005 WL 5419056, at *2 (N.D.N.Y. Jan. 25, 2005) (noting that [i]t has been held that claims for overtime under the New York Labor Law may not be maintained as a class action where there is a demand for liquidated damages ). The case law barring class action claims brought pursuant to the New York Labor Law is well established. 6 For example, in Ballard v. Cmty. Home Care Referral Serv., Inc., 264 A.D.2d 747 (2d Dep t 1999), the court affirmed the denial of a home health care aide s motion to strike the employer s affirmative defense that her claims for unpaid overtime under the NYLL could not be brought as a class action under CPLR 901(b), holding that [t]he fact that the plaintiff s complaint contains a claim for liquidated damages precludes class action relief. Id. at 748. In Carter v. Frito-Lay, Inc., 74 A.D.2d 550 (1st Dep t 1980), aff d, 52 N.Y.2d 994 (1981), the court affirmed denial of a motion for class certification under CPLR 901(b), noting that the complaint requested liquidated damages and that NYLL 198(1-a) 6 Courts have also applied CPLR 901(b) to class action claims brought under other statutes. See, e.g., Paltre v. General Motors Corp., 26 A.D.3d 481, 483 (2d Dep t 2006) (affirming dismissal of class action claim, holding that the treble damages provision of General Business Law 340[5] is a penalty within the meaning of CPLR 901(b), and that plaintiffs Donnely Act class action claims could not be maintained because the Donnelly Act does not specifically authorize the recovery of that penalty in a class action); Ridge Meadows Homeowners Ass n v. Tara Dev. Co., 242 A.D.2d 947, 947 (4th Dep t 1997) (holding that supreme court properly found that CPLR 901(b) barred plaintiffs from maintaining a class action for treble damages under 349(h) of the General Business Law, but that plaintiffs consent, on appeal, to strike that relief and to limit their demand to actual damages rendered CPLR 901(b) inapplicable and allowed plaintiffs to maintain their claim as a class action); Cox v. Microsoft Corp., 8 A.D.3d 39, 40 (1st Dep t 2004) (holding that CPLR 901(b) prohibits class actions for recovery of minimum or punitive damages, but that CPLR 901(b) was inapplicable to plaintiffs class action claim under General Business Law 349, since plaintiffs amended complaint sought only actual damages, and not minimum or punitive damages). 5 9 of 16

provides for liquidated damages but does not authorize recovery of those damages in class action. Id. at 550. Here, although the amended complaint does not expressly seek liquidated damages, plaintiff s class action claim (the First Claim For Relief) does seek unpaid overtime pay and other damages under the NYLL on behalf of the putative class members (AC 23 (emphasis added)), as well as [a]n award of damages including unpaid overtime wages (prayer for relief at No. 3), and other legal... relief. Id. 36; prayer for relief at No. 7. Accordingly, (1) because the NYLL provides for the recovery of liquidated damages and other penalties, (2) because plaintiff s request for damages is not limited to actual damages but broadly requests other damages under the NYLL, and (3) because the NYLL does not specifically authorize plaintiff to bring a class action to recover liquidated damages or other penalties, CPLR 901(b) bars plaintiff from asserting them as class action claims. B. Plaintiff s Class Action Claim Is Barred by CPLR 901(b) Because Plaintiff Has Not Waived The Right To Recover Liquidated Damages or Other Penalties Although plaintiff s amended complaint does not expressly seek liquidated damages, plaintiff s failure to expressly waive recovery of liquidated damages and other penalties on behalf of himself and the putative class requires dismissal of his class action claim under CPLR 901(b). Where a statute imposes a nonmandatory penalty, plaintiffs may waive the penalty in order to bring the claim as a class action.... Borden v. 400 East 55th Street Assocs., L.P., 24 N.Y.3d 382, 394 (2014) (noting that plaintiff had waived her right to treble damages under the Rent Stabilization Law through attorney affirmation). 6 10 of 16

Thus, while it is true that a plaintiff can avoid application of 901(b) by waiving his right to liquidated or punitive damages, neither the amended complaint nor any other court document here contains the required waiver. Klein v. Ryan Beck Holdings, Inc., 2007 WL 2059828, at *2 (S.D.N.Y. July 13, 2007) (emphasis added); see Thomas, 39 Misc.3d 1217(A), at *4 ( liquidated damages under Labor Law 198 are discretionary and may be waived ); Super Glue Corp. v. Avid Rent A Car Sys., Inc., 132 A.D.2d 604, 606 (2d Dep t 1987) ( Although CPLR 901 (b) bars a class action to recover a penalty or minimum damages imposed by statute, where, as here, the statute does not explicitly authorize a class recovery thereof, the named plaintiff in a class action may waive that relief and bring an action for actual damages only. ); Smellie v. Mount Sinai Hosp., 2004 WL 2725124, at *5 (S.D.N.Y. Nov. 29, 2004) (noting that [c]ourts in this District have held that a class action seeking damages for violations of the wage provisions of New York s Labor Law can be maintained if no liquidated or punitive damages are sought, but that the CPLR 901(b) barrier to the class action was removed because plaintiffs amended complaint expressly asserted that plaintiffs do not seek liquidated or punitive damages for this claim under the New York State Labor Law ); Downing v. First Lenox Terrace Assocs., 107 A.D.3d 86, 89 (1st Dep t 2013), aff d, Borden v. 400 East 55th Street Assocs., L.P., 24 N.Y.3d 382 (2014) (noting that plaintiffs have been allowed to waive their right to liquidated damages under Labor Law 198 (1-a) to preserve the right to maintain a class action). Here, the amended complaint does not contain any waiver of plaintiff s right to recover liquidated damages or other penalties under the NYLL on behalf of himself or the putative class for the First Claim For Relief. Because the plaintiff has failed to waive the right to recover liquidated damages on this claim, the claim is barred under CPLR 901(b) and should be dismissed. 7 11 of 16

POINT II. PLAINTIFF HAS NOT STATED A CLAIM UNDER NYLL SECTION 195(1) A. Plaintiff Fails To Allege That HCS Did Not Provide Wage Notices At the Time Of Hire Plaintiff s Second Claim for Relief is entitled Notice Violations & Wage Statement Violations NYLL 195. Plaintiff broadly alleges that HCS failed to provide Plaintiff with the notices required by NYLL 195(1) (AC 21) and that HCS failed to supply Plaintiff with the notice required by NYLL 195(1).... Id. 38; see also id. 40 (seeking penalties under NYLL 198(1-b)). 7 Plaintiff further claims that [HCS] failed to supply Plaintiff with the notice required by NYLL 195(1)... containing their rate or rates of pay and the basis thereof... hourly rate or rates of pay and overtime rate or rates of pay if applicable; allowances... including tip, meal, or lodging allowances; the regular pay day designated by the employer... the name of the employer... the physical address of the employer s main office... [and] the telephone number of the employer.... Id. 38. These allegations largely echo the language in NYLL 195(1)(a). The language of NYLL 195(1)(a) paraphrased in paragraph 38 of the amended complaint was enacted as part of the Wage Theft Prevention Act ( WTPA ), which became effective on April 9, 2011. See Guan Ming Lin v. Benihana N.Y. Corp., 2012 WL 7620734, at *2 (S.D.N.Y. Oct. 23, 2012), report and recommendation adopted, 2013 WL 829098 (S.D.N.Y. Feb. 27, 2013). Importantly, a claim under section 195(1)(a) necessarily fails when the plaintiff began employment prior to April 9, 2011 the effective date of the WTPA. See id. at *8; 7 HCS notes that the version of NYLL 195(1) effective prior to April 9, 2011 did not include an annual notice requirement. Additionally, the version of NYLL 195(1) effective after December 29, 2014 omitted the annual notice requirement. 8 12 of 16

Yuquilema v. Manhattan s Hero Corp., 2014 WL 4207106, at *11 (S.D.N.Y. Aug. 26, 2014) (holding that none of the plaintiffs could recover under section 195(1) since each commenced employment prior to April 9, 2011, and there is no private right of action for violation of section 195(1) s annual notice provisions); Kone v. Joy Const. Corp., 2016 WL 866349, at *5 (S.D.N.Y. Mar. 3, 2016) (noting that an employee who began working before April 9, 2011 may not bring a claim for an employer s failure to provide wage notices). To the extent the plaintiff attempts to allege that HCS violated the time-of-hire notice provisions in 195(1), plaintiff s claim fails for two reasons. First, plaintiff does not allege the date on which he was hired by HCS. Rather, the complaint vaguely alleges that plaintiff was employed by HCS for approximately two years in 2011 and 2013. AC 8. Second, the plaintiff does not allege that HCS failed to provide him with the required wage notices at the time he was hired. These pleading deficiencies are fatal to the Second Claim For Relief to the extent that claim is based on HCS alleged violations of section 195(1) s time-ofhire provisions. Accordingly, it must be dismissed. See Kone, 2016 WL 866349, at *5 (granting motion to dismiss NYLL 195(1) claim where the complaint ma[de] no allegation that this failure occurred at the time of hire, which is required to establish a violation of NYLL 195(1)(a) ). B. There is No Private Right of Action for an Alleged Violation of the Annual Notice Provisions in NYLL Section 195(1) Plaintiff s claim based on NYLL 195(1) should be dismissed to the extent it alleges a claim for HCS s alleged violations of the statute s annual notice provisions, since plaintiff does not have a private right of action under NYLL 198(1-b) to recover damages on that claim. 9 13 of 16

[T]he NYLL does not provide a private right of action where an employer fails to provide annual notices; rather, it only provides such a private right of action where the employer fails to provide the notice at the time of hire. Hinckley v. Seagate Hospitality Grp., LLC, 2016 WL 6524314, at *8 (W.D.N.Y. Nov. 3, 2016) (holding that to the extent the complaint attempted to assert a claim for damages based on defendant s failure to provide annual notices as required by NYLL 195(1), the claim was dismissed); see Guan Ming Lin, 2012 WL 7620734, at *8 ( The plain language of the statute... confers a private right of action upon those who do not receive their notice at the time of hiring, but not upon those who do not receive it on or before February first of any subsequent year. NYLL 198(1 b). ); Yuquilema, 2014 WL 4207106, at *11 ( [T]he NYLL extends this private cause of action to employees whose employer fails to provide the initial notice at their hire, but not for subsequent failures to furnish the annual notice in following years ). Accordingly, plaintiff cannot state a claim based on HCS alleged violation of the annual notice requirements under NYLL 195(1), since there is no private right of action on that claim. To the extent the amended class action complaint asserts a claim based on the annual notice requirements in NYLL 195(1), that claim must be dismissed. See Hinckley, 2016 WL 6524314, at *8. POINT III. PLAINTIFFS CLAIMS MUST BE DISMISSED WITH PREJUDICE Finally, the Court should refuse to permit plaintiff to amend his amended complaint because he has failed to remedy the defects of his claims, despite having notice of those defects. 10 14 of 16

Defendant Home Health Care Services of New York Inc. moved to dismiss plaintiff s original complaint on February 15, 2017, on grounds that the claims were barred by CPLR 901(b) and failed to state a claim under NYLL 195(1). Plaintiff filed the amended complaint two days later, on February 17, 2017. The amended complaint contains the same claims as the original complaint (except the amended complaint only asserts the First Claim For Relief on behalf of the class, and no longer includes an express request for liquidated damages ). 8 Notably, the allegations with respect to plaintiff s NYLL 195(1) claim largely remain the same, and fail to cure the pleading deficiencies raised by HCS in its motion to dismiss the original complaint. Before filing the amended complaint, plaintiff had the benefit of briefing by HCS, in which it set forth its arguments in detail and illuminated the deficiencies of plaintiff s claims. Yet, instead of amending his pleading to address and possibly remedy the deficiencies previously identified by HCS, he chose to file an amended complaint that makes no attempt to cure or otherwise remedy those deficiencies. Accordingly, to the extent the Court grants HCS motion to dismiss the claims in the amended complaint, it should do so with prejudice. Conclusion For the reasons discussed above, HCS respectfully requests that this Court grant its motion to dismiss plaintiff s amended class action complaint pursuant to CPLR 3211(a)(7) with prejudice. 8 As discussed in Section I(B) supra, plaintiff is required to waive liquidated damages in order to maintain the First Claim For Relief as a class action claim, which he has failed to do. 11 15 of 16

Dated: March 9, 2017 HODGSON RUSS LLP Attorneys for Defendants By: s/ Paul I. Perlman Paul I. Perlman Peter C. Godfrey Sarah N. Miller The Guaranty Building 140 Pearl Street, Suite 100 Buffalo, New York 14202-4040 716.856.4000 pperlman@hodgsonruss.com pgodfrey@hodgsonruss.com smiller@hodgsonruss.com 12 070542.00006 Litigation 14328021v1 16 of 16