2005 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit 6-14-2005 

# Liu v . O r ie n t al B u ffet I nc P r e c e de n t i al or N on-P r e c e de n t i al : N on-P r e c e de n t i al D ocke t N o . 04-2850

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Thi s de c i sion i s br ou gh t t o you for f r e e a nd ope n a c c e s s b y the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit at V i l l a no va U nive r sit y S choo l of L a

w Di g it al Re posit or y

. It h as be e n a c c e pt e d for inclusion in 2005 D e c i sion s b y a n author i z e d a dmini s tr at or of V i l l a no va U nive r sit y S choo l of L a

w Di g it al Re posit or y

. F or mor e infor m at ion, p le as e c on t a ct Be n j a min . C a rl s on@l a

w . v i l l a no va . e du . Re c omme nde d C it at ion
" L iu v . Or ie n t al B u ffe t I nc " (2005). 2005 D e cisio n s . P ape r 1020. h tt p://d i g it alc ommon s .l a

w . v i l l a no va . e du/thir dc ir c uit_2005/1020NOT P RE CE DE NT I AL UN I TED STATES CO UR T OF A PP EALS F O R T H E T H IR D C IR C U IT

__________ N o. 04- 2850

__________ M E I YI NG L I U AND S HU F ANG C HE N, A pp el l ants v. OR I ENTA L BU FF ET, d / b / a KI NG CH EF BUFFE T; M ETRO POLI TAN BU FF ET CO RP OR AT I ON, d / b / a M E T RO P OL I T AN B UF F E T ; AN NA Z HE NG; XI AO YAN G Z HE NG; BE N L I ANG Z HU; F RA NK C HAN, a / k / a KAI T UNG C HE N, a / k / a KAI T ONG C HE N, a / k / a KAI CH I ANG C HAN, a / k / a KAI CH E UNG C HAN, a / k / a KAI CH E ONG C HAN; a n d DE GI CH I NG, a / k / a T HE QI CH I NG, a / k / a J I M M Y C HI NG

__________ O n A p p ea l from the U n it ed S tat es D istri ct C o u rt

for t he D i s t r i ct of N ew J er s ey ( C i vi l N o. 03- 2406) D i s t r i ct J udge: H onor abl e K at her i ne S. H ay den

________ A r gued: M ay26, 2005

___________ B efor e: SC I R I C A , C hi ef J udge, A L I T O and G A R T H , C i r cui t J udges

( O pi ni on Fi l ed: J une 14, 2005)

__________2

C l audi a Fl or es , E s qui r e ( A r gued) L en o ra M . L ap idu s, E sq u ir e A m er i can Ci vi l L i ber t i es U ni on 125 B r oad St r eet 18 Fl oor th N ew Y or k, N Y 10004

C o u n se l fo r Ap

p e lla n ts St even C. M anni on, E s qui r e ( A r gued) D eC ot i i s , Fi t zpat r i ck, C ol e & W i s l er 5 0 0 F ran k W . B u rr B o u leva rd T eane ck, N J 07666

C o u n se l fo r Ap

p e llee O rie n ta l B u

ffet In c ., e t a l. D onna D . G ar di ner , E s qui r e ( A r gued) M cEl r oy , D eut s ch, M ul vaney& C arpent er 1300 M ount K embl e A venue M or r i s t ow n, N J 07962

C ouns el f orAppel l ee M

et r o B uf f et C or p. OP I NI ON

__________ G ar t h, C i r cui t J udge: M ei Y i ng L i u and Shu Fang C hen ( t he “Pl ai nt i ffs ”) appea l fr om t he D i s t r i ct C ou rt ’s su a sp o n te or der di s m i s s i ng t hei r empl oy m ent di s cr i m i nat i on and unfa i r l abor p ra c tice s a c tio n f

o r f a ilu re to e f

f e c t ti m e lyse rv ice p u rsu a n t to F e d e ra l R u le o f C iv il P ro c e d u re 4 (m ). T h e y c o n ten d th a t th e D istric t C o u rt a b u se d its d isc re tio n b yf a ili n g to p ro v id e th e m w ith a c tu a l n o tice p rio r to d ism iss in g th e c a se . W e a g re e a n d so w ill v a c a te t he D i s t r i ct C our t ’ s or der of di s m i s s al and r emand t he ca s e forfur t her pr ocee di ngsT h e se rv ice c laim e d to h a v e b e e n a c h iev e d b yth e P lain tiff s is d e taile d in th e ir 1 br i ef a nd w as found t o be i neff ect i ve as not confor m i ng t o t he s er vi ce rul es s et out i n Fed. R . C i v. P. 4. W hi l e t he D i s t r i ct C our t ’ s or der i n t hi s r es pectw as not appea l ed, t he Pl ai nt i ffs have i ncl uded al l of t he D efe ndant s i n t hei r A m ended Com pl ai nt , t he di s m i s s al of w hi ch has been a ppeal ed. 3 cons i s t ent w i t h t hi s opi ni on. I. B eca us e w e w r i t e onl y for t he par t i es , w e r ecountt he fa ct ual and pr ocedur al hi s t or y onl y as t heyar e r el evantt o t he fol l ow i ng di s cus s i on. O nM ay 2 2 , 2 0 0 3 , th e P lain tif

f s f ileda co m

p lain t (th e “O rig in al C o m p lain t”) in th e U n itedS tates D istrict C o u rt f o r th e D istrict o f

N ew Jersey

ag ain st th eir em

p lo yers: Or i e nt a l Buffe t , d/

b/ aKi ng Che f Buffe t , An NaZhe ng, Xi a o Yang Zhe ng, Be n Li ang Zhu, Fr ank Chan, and Ka i Tung Chan, the m ana ge r s , s har e hol de r s , and owne r s of Or i e nt a l Buffe t , and J i mmy Chi ng, the he a d wa i t e r

of the r e s t aur ant

( c ol l e c t i ve l y , the

“ De fe ndant s ” ) . The Pl a i nt i ffs a l l e ge d that the y we r e ke pt

unde r the c om pl e t e c ontr ol of the De fe ndant s , we r e pa i d no wa ge s for the i r work, ha d t o pay

ada i l y ki c kba c k out

of th eir tip s to th e D ef

en d an ts, f acedg en d er an deth n icity d iscrim in atio n , w ere h o u sedin de pl or abl e c ondi t i ons , and we r e thr e at e ne d wi th de ath whe n the y s t oppe d worki ng at

the r e s t aur ant . The y

s ought r e l i e f unde r

s t at e and fe de r a l ove rt i m e and wa ge l aws , s t at e and f ed eral d iscrim in atio nlaw s, an df ed eral civ il rig h ts law s. The Pl a i nt i ffs c l a i m

that the y s e rve d a l l of the De fe ndant s e xc e pt for J i mmy Chi ng on June 3, 2003. The y

c e rt i fi e d s uc h s e rvi c e on June 20, 2003. 14

Befo re any

of the Defendants file d an answer, t he Plai ntiffs file d an am ended com plai nt on June 11 , 200 3 (the “ Am ended C om plai nt”) . Acc ording to the Dis tr ic t Court , the Pl a i nt i ffs am e nde d the c om pl a i nt t o ( 1) a dd abr e a c h of c ontr a c t c l a i m , ( 2) a dd Me tr opol i t an Buffe t

Cor por at i on a s ade fe ndant , ( 3) l i s t fi ve a l i a s e s for

de fe ndant

Fr ank Chan i nc l udi ng Ka i Tung Chan who wa s form e r l y nam e d a s as e par at e de fe ndant ( the r e by e l i m i nat i ng Ka i Tung Chan a s anam e d de fe ndant ) , and ( 4) nam e De Gi Chi ng as a d ef en d an t w ithJimmy

C h in g as analias (th ereb y elim in atin g Jimmy

C h in g as a nam ed defend ant) . On June 30 , 200 3, befo re the Pla inti ff s had effecte d ser

vice of the Am ended Com pl a i nt , the Di s tr i c t

Court or de r e d the Pl a i nt i ffs t o s e e k de faul t and de faul t

judgm e nt wi th r e s pe c t

t o the Or i gi na l Com

pl a i nt be c aus e the De fe ndant s ha d fa i l e d t o ans we r . The P lain tif f s co m p liedw ithth e C o u rt’s o rd er an dd ef au lt w as en teredo nJu ly

9 , 2 0 0 3 . De faul t judgm e nt

i n the am ount

of $3, 445, 186. 06 wa s e nt e r e d on Se pt e m be r 24, 2003. Af te r default

ju dg m ent was ente re d, the Pla inti ff s a ll ege that they

effecte d ser

vice o f th e A m en d edC o m

p lain t o nM etro p o litanB u f f et, X iao Y an g Z h en g , an dF ran kC h an . The y a l s o c l a i m

that the y att e m pt e d uns uc c e s s ful l y

t o s e rve the Am e nde d Com pl a i nt on Orie ntal Bu ff

et , An N a Zheng , Ben Liang Z hu , andDe Ji Qin. Th e Pla inti ff s a dm it that th ey ceasedth eir ef

f o rts to serv e th e A m en d edC o m p lain t o nth e rem ain in g D ef en d an ts up o nreceiv in g n o tice o f

th e D ef en d an ts’ m o tio nto v acate th e d ef au lt j u d g m en t. On October 17, 20 03 , the Defend ants (with the exce ption o f Jim my Ch ing) m ov edPl ai nt i ffs al s o cl ai m t hat a di s m i s s al or derfor fai l ur e t o s er ve def endant s i s , by 2 its v e ry n a tu re , a d ism iss a l w ith p re ju d ice . W e e x p re ss n o o p in io n w ith re sp e c t to th is a rg u m e n t. 5 to vacate the default

ju dg m ent. Th e Pla inti ff

s fil ed le ng thy

op po si ti on papers afte r which the Di s tr i c t

Court t ook the m att e r

unde r a dvi s e m e nt . On May

27, 2004, e i ght

m onths a ft e r the de faul t

judgm e nt

wa s e nt e r e d, the Di s tr i c t Court va c at e d the judgm e nt . On the sam e d ay , p u rsu an t to F ed eral Ru le o f C iv il P ro cedu re 4 (m ), th e D istrict C o u rt s ua sp o n tedism is se d the enti re ac ti on withou t pre ju dice ( i. e. , both the Or i gi na l and the A m en d edC o m

p lain ts) f o r f ailu re to tim ely

serv e th e D ef

en d an ts. T h e P lain tif

f s th enf iledth is tim ely

ap p eal. II. T he D i s t r i ct C our t had j ur i s di ct i on pur s uant t o 28 U . S. C . §§ 1331, 1337 and 1343, as w el l as s uppl ement al j ur i s di ct i on over t he Pl ai nt i ffs ’ s t at e l aw cl ai m s pur s uant t o 28 U . S. C . § 1367. A l t hough t he D i s t r i ct C our t di s m i s s ed t hi s cas e w i t hout pr ej udi ce, i t s di s m i s s al o rd e r is f in a l an d a p p e a lab le b e c a u se th e P lain tiff s in f o rm e d u s th a t th e yh a v e e lec ted to s ta n d o n th e ir c o m p la in t. See Lucas v. Tow ns hi p of B et hel , 3 1 9 F . 3 d 5 9 5 , 6 0 0 (3d C ir . 2 0 0 3 ); B or el l i v. C i t

y of R eadi ng , 5 3 2 F . 2 d 9 5 0 , 9 5 1 -52 (3d C ir . 1 9 7 6 ) (pe r cu ri am ). 2 A c c o rd in g ly, w e h a v e a p p e lla te ju ri s d ic tio n p u rs u a n t to 2 8 U .S .C . § 1 2 9 1 . W e revi ew a dis m i ssal pu rs uan t t o F ederal R ule of C i vil P rocedu re 4( m ) for abu se o f d is c re tio n . See B oley v. Kaym ark , 12 F. 3d 767, 758 ( 3d C i r . 1997) ( ci t i ng A yr es v.6

J a c o b s & Cr u mpl a r, P. A. , 9 9 F . 3 d 5 6 4 , 5 6 8 (3d C ir . 1 9 9 6 )). III . Fe de r a l Rul e of Ci vi l Pr oc e dur e 4( m ) di r e c t s di s tr i c t c ourt s t o di s m i s s an a c t i on up on a pla inti ff’s fail ure t o eff ec t t im el y se rvic e: I f s e r vi c e of the s umm ons and c om pl a i nt i s not m a de upon a d ef en d an t w ith in1 2 0 d ay s af ter th e f ilin g o f th e co m p lain t, the c ourt , upon m ot i on o r o n its o w n in itia tive a fter n o tice to th e p la in tiff

, sh all d ism iss th e actio nw ith o u t p rej u d ice as to that de fe ndant

or di r e c t that s e rvi c e be e ffe c t e d wi thi n a sp ecif iedtim e; p ro v id edth at if

th e p lain tif

f sh o w s good ca u sefor the fa i l ur e , the c ourt

s ha l l e xt e nd the t i m e for serv ice f o r anap p ro p riate p erio d . F ed . R . C iv . P . 4 (m) (em

p h asis ad d ed ). T h e P lain tif

f s arg u e th at th e p lainlan g u ag e o f Ru le 4 (m ) clearly

requ ires th at a di s m i s s a l for

fa i l ur e t o e ffe c t

t i m e l y s e rvi c e m

us t be pr e c e de d by

not i c e t o the pl a i nt i ff of th e d istrict co u rt’s in ten tio nto d ism iss th e actio n , to allo w th e p lain tif f to d em o n strate go odca use for it s fai lure to com

ply with the r

ule’ s 120 day

se rvic e r equire m ent. Th ey r e l y on the Se c ond Ci r c ui t ’ s de c i s i on i n Thomps on v . Maldonado , 309 F. 3d 107, 110 ( 2d Ci r . 2002) ( pe r

c ur i am ) i n whi c h that

c ourt he l d: “ As i ndi c at e d by

the pl a i n l angua ge of Ru le 4(m ), no ti ce to the pla inti ff m ust be given prior t o a su a sp o n tedism is sa l. ” Id
. W e a g r e e w i than dth e r e f o r e j o i nth e S e c o n dC i r c u i t i nh o l d i n g th at

Ru l e 4 ( m) r e qui r e s adi s tr i c t

c ourt t o gi ve not i c e pr i or

t o di s m i s s i ng an a c t i on upon i t s own m ot i on fo r fai lure to effect

ti m el y se rvic e. In so do ing, we re ject the Defendant’s posit ion that th e o rd er o f

d ism issal itself

co n stitu tes su f

f icien t n o tice u n d er Ru le 4 (m ).7

The De fe ndant s r e l y

pr i nc i pa l l y

on the Fi r s t

Ci r c ui t ’ s de c i s i on i n Ru iz Va re la v. Sa nchez Velez , 814 F. 2d 821, 823- 24 ( 1s t Ci r . 1987) ( pe r

c ur i am ) , whi c h he l d that the fail ure t o g ive a ct

ual, prior notic e i s not grou nd s for vacat ing the dism is sa l, so long as th ere is n o p rej u d ice to th e p lain tif f . S ee R u iz V a rela , 814 F. 2d at

824. I n part i c ul ar , the Defend ants ar gu e that the Plai ntiffs had an o pp ortunity to show go odca

use bec ause they c oul d have fi l e d am ot i on for r e c ons i de r at i on upon r e c e i vi ng the or de r di s m i s s i ng the a c t i on. R u iz V

a rela , h o w ev er, w as d ecid edb ef o re th e en actm en t o f

th e cu rren t Ru le 4 (m ). I n i t s pr i or

form ul at i on, a s Rul e 4(

j) , the r ul e wa s l e s s e xpl i c i t

on the r e qui r e m e nt

of pr i or no ti ce : I f as e r

vi c e of the s umm ons and c om pl a i nt i s not m a de upon a de fe ndant wi thi n 120 day s a ft e r

the fi l i ng of the c om

pl a i nt and the party

onwh ose behal f such ser vice was r equire d c annot s how good c aus e why

s uc h s e rvi c e wa s not

m a de wi thi n that

pe r i od, the a c t i on s ha l l be di s m i s s e d upon the c ourt ' s own i ni t i at i ve wi th not i c e t o s uc h party or upon m o tio n . Fed.R.Civ.P. 4(j) (r epea le d). Unlike form er Ru le 4(j), the curre nt Ru le 4(m ) s tate s e xpl i c i t l y that di s m i s s a l s ha l l be or de r e d afte r not i c e t o the pl a i nt i ff. Gi ve n the m o d if icatio nto Ru le 4 (m ), p rio r n o tice is requ iredirresp ectiv e o f w h eth er th e p lain tif

f is p rej u d icedb y

th e d ism issal. W e ar e s i m i l ar l y

unpe r s ua de d by

the De fe ndant s m ot i on for r e c ons i de r at i on ar gum e nt . Whi l e the Pl a i nt i ffs ha d the r i ght t o m ove for

r e c ons i de r at i on, the y

ha d noA lth o u g h th e P lain tiff s p re se n ted m a n yo f

th e ir g o o d c a u se a rg u m e n ts o n th is 3 a p p e a l, w e w ill n o t ad d re ss th e m h e re in b u t w ill in ste a d d ire c t th e D istric t C o u rt to a d d re ss th o se a rg u m e n ts in th e f irst in sta n c e . A c c o rd in g ly , w e e x p re ss n o o p in io n a s to w h e th e r o r n o t th e P lain tiff s h a v e m a d e o u t a s h o w in g o f g o o d c a u se f

o r f a ilu re to tim e ly ser ve cert ai n o f t he D efen dan t s.
8 ob li gati on to do so. The fact that the Pla inti ff

s had the opt i on t o m ove for reco n sid eratio nd o es n o t n eg ate Ru le 4 (m )’s re qui re me nt that adi s tr i c t c ourt pr ovi de pr i or not i c e . Unde r

the c i r c um s t anc e s he r e , we ar e not pe r s ua de d that

the l a c k of pr i or n o tice w as h arm less. I V. Inth is case, th e D istrict C o u rt im p ro p erly ex ercisedits d iscretio nw h enit f ailedto gi ve a c t ua l no t i c e pr i or

t o e nt e r i ng i t s or de r

a s r e qu i r e d b y

Ru l e 4( m ) . Ac c or di ng l y , we willvacate the dis m is sa l order date d M ay

27 , 200 4 andre m and the ca se to the Dis tr ic t C o u rt f o r f u rth er p ro ceed in g s inacco rd an ce w ithRu le 4 (m ) an dth is o p in io n . On r e m and, the Di s tr i c t

Court s houl d c ons i de r

whe the r the Pl a i nt i ffs have dem on strate d g oo d cause fo r their fail ure t o p roperl y

se rve c erta in of

the Defendants. In 3 the e vent that

the Pla inti ff

s s ee k an extensi on of

ti m e t o eff

ec t s er vice , the Distri ct

Co urt s houl d c ons i de r

whe the r s uc h an e xt e ns i on i s warr ant e d i n the e xe r c i s e of i t s di s c r e t i on . I n a ddi t i on, i t

appe ar s that

c e rt a i n de fe ndant s m ay

have wa i ve d the de fe ns e of insuff ic ie nt or un ti m el y

se rvic e. No ta

bly , c ou nsel fo r Metropo li tan B uf fet c on ce ded that it w aiv edan y

claim o f u n tim ely serv ice b y

f ilin g anan sw er an df

ailin g to raise u n tim elys e rvi c e a s an a ffi rm at i ve de fe ns e . Mor e ove r , the Pl a i nt i ffs c l a i m that Xi a o Yang Zhe ng an dF ran kC h anw ere p ro p erly serv edw ith in1 2 0 d ay s o f f ilin g th e A m en d edC o m

p lain t, al l i n acc ordance with Rule 4(m). Zh eng andCh an appear t o con te st this cl ai m . W e ex p ress n o o p in io nb u t leav e it to th e D istrict C o u rt f o r its d eterm in atio n . T h u s, w e w ill r e m and the e nt i r e c a s e and furthe r i ns tr uc t the Di s tr i c t

Court t o de t e rm i ne whe the r

the Am e nde d Com

pl a i nt s houl d be r e i ns t at e d a s t o c e rt a i n of the De fe ndant s i rr e s pe c t i ve of wh ether the Plai ntiffs ar e a ble t o d em on strate go odca use pursuant t o Rule 4(m).

9