Opinion ID: 605
Heading Depth: 3
Heading Rank: 3

Heading: Calculation of the Amount of Restitution

Text: In 18 U.S.C. § 1593, Congress provided for mandatory restitution to victims in cases of, among other things, peonage, forced labor, and document servitude. 18 U.S.C. § 1593(a). Specifically, the order of restitution ... shall direct the defendant to pay the victim ... the full amount of the victim's losses. Id. § 1593(b)(1). The statute defines the full amount of the victim's losses, in pertinent part, as 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(b)(3). Here, the district court consulted the Fair Labor Standards Act's (FLSA) minimum wage and overtime provisions, 29 U.S.C. §§ 206 and 207, and determined minimum wage rates for the period of Samirah's and Enung's labor, which it multiplied by a statutorily determined factor to calculate overtime pay. The court performed its calculations on the basis that the maids worked 24 hours per day when the Sabhnanis were at home, and eight hours per day when the Sabhnanis left the country during the summer months. The court subtracted the money that had actually been paid to the victims' families in Indonesia. Finally, it doubled the total award pursuant to 29 U.S.C. § 216, which allows for double damages for employers who violate the FLSA's minimum wage and overtime provisions. Based on these calculations, the district court awarded $620,743.82 to Samirah and $315,802.40 to Enung. The Sabhnanis raise three separate challenges to these awards on appeal. First, they argue that the district court erred in finding that Samirah and Enung were entitled to overtime pay because the court failed properly to apply a statutory exemption to FLSA for payment of overtime to domestic servants who reside in their employer's household. Second, they argue that the district court should have conducted an evidentiary hearing to determine the exact number of hours the victims worked, and that the court clearly erred in calculating the award based on a determination that the victims worked 24-hour days. Finally, they argue that the district court erred in awarding liquidated damages pursuant to 29 U.S.C. § 216(b). We agree that the district court erred in awarding overtime pay, and thus we vacate the restitution award and remand for recalculation. We conclude, however, that the district court was within its discretion not to hold an evidentiary hearing and that it did not err in awarding liquidated damages.
Pursuant to 29 U.S.C. § 207, and with regard to covered employees, no employer shall employ any of his employees... for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half time the regular rate at which he is employed. 29 U.S.C. § 207(a)(1). Congress extended this maximum hours provision to domestic workers in 1974. Coke v. Long Island Care at Home, Ltd., 376 F.3d 118, 123 (2d Cir. 2004), vacated on other grounds, 546 U.S. 1147, 126 S.Ct. 1189, 163 L.Ed.2d 1125 (Mem.) (2006). However, 29 U.S.C. § 213(b)(21) provides that Section 207 shall not apply with respect to ... any employee who is employed in domestic service in a household and who resides in such household. 29 U.S.C. § 213(b)(21). The Sabhnanis argue that this exemption to Section 207 applies to Samirah and Enung and thus that the district court's restitution award, which was calculated using the overtime provision, was erroneous. The government argues that the exemption does not apply on the theory that Samirah and Enung did not reside with the Sabhnanis because the Sabhnanis failed to provide, among other things, appropriate living quarters, adequate sleeping facilities and adequate meals. Gov't's Br. 127. It is undisputed that Samirah and Enung were employed in domestic service in a household under 29 U.S.C. § 213(b)(21); the only question is whether they were employees who resided in the Sabhnanis' home. Well-established principles of construction dictate that statutory analysis necessarily begins with the `plain meaning' of a law's text and, absent ambiguity, will generally end there. United States v. Venturella, 391 F.3d 120, 125 (2d Cir.2004) (quoting Collazos v. United States, 368 F.3d 190, 196 (2d Cir.2004)) (internal quotation marks omitted). We interpret the unambiguous terms of statutes according to their ordinary and plain meaning. Lee v. Bankers Trust Co., 166 F.3d 540, 544 (2d Cir.1999) (It is axiomatic that the plain meaning of a statute controls its interpretation, and that judicial review must end at the statute's unambiguous terms. (citation omitted)). To reside generally means [t]o dwell permanently or for a considerable time; to have one's settled or usual abode; to live, in or at a particular place. Oxford English Dictionary (2d Ed.1989). In Venturella, we noted that the term resides in its normal use denotes residence. Venturella, 391 F.3d at 125 (citing Webster's Third New Int'l Dictionary 1931 (2000); United States v. Namey, 364 F.3d 843, 845 (6th Cir.2004)). Other courts have also determined that whether one resides in a place, in the natural and ordinary sense of the phrase, refers to whether one lives there and makes one's permanent or semi-permanent home in that place. See, e.g., Weems v. Little Rock Police Dep't, 453 F.3d 1010, 1016 (8th Cir.2006); Gusewelle v. City of Wood River, 374 F.3d 569, 577 (7th Cir.2004) (city rules requiring employees to reside within city limits meant employees must maintain their primary residence there); see also Rosenruist-Gestao E Servicos LDA v. Virgin Enters. Ltd., 511 F.3d 437, 450 (4th Cir.2007) (Wilkinson, J., dissenting) (noting that dictionary meaning of a witness residing in a judicial district for purposes of 35 U.S.C. § 24 is that the witness dwell[s] permanently or for a considerable time there). This meaning is even used when such residence is involuntary, as in the case of one residing in a prison. See, e.g., Hewitt v. Helms, 459 U.S. 460, 466, 103 S.Ct. 864, 74 L.Ed.2d 675 (1983) (describing claim of protected liberty interest in continuing to reside in the general prison population), abrogated on other grounds by Sandin v. Conner, 515 U.S. 472, 483 & n. 5, 115 S.Ct. 2293, 132 L.Ed.2d 418 (1995). Because there is no doubt that Samirah and Enung lived in the Sabhnanis' house and did so as permanent residents for a considerable time, we conclude that the maids were employee[s] who [were] employed in domestic service in a household and who reside[d] in such household for the purpose of the § 213(b)(21) exemption. See, e.g., Manliguez v. Joseph, 226 F.Supp.2d 377, 381, 388 (E.D.N.Y.2002) (finding that live-in domestic servant was covered by § 213(b)(21) exemption); see also Almeida v. Aguinaga, 456 F.Supp.2d 505, 506, 508 (S.D.N.Y.2006) (plaintiff live-in domestic servant conceded, and court agreed, that § 213(b)(21) exemption applied). The sources relied on by the government to argue against this construction of Section 207 are both unpersuasive and inapplicable. The government points to an Opinion Letter of the Department of Labor that interpreted, in the context of a different regulation, what it means for an employee to reside[] on his employer's premises... for extended periods of time. Opinion Letter Fair Labor Standards Act (FLSA), 1981 WL 179033 (Dep't of Labor, Feb. 3, 1981) (hereinafter FLSA Opinion Letter) (quoting 29 C.F.R. § 785.23). The letter determined that the employees in question, who were employed as houseparents in a privately-owned community for the developmentally disabled and who stayed overnight at the facilities for five or six days in a row, were residing at their employer's premises notwithstanding the fact that the employees maintained their own private residences. Id. Where the facilities offered by the employer provide a home-like environment with private quarters separate from the residents of the group home, according to the FLSA Opinion Letter, the employees should be regarded as residing there (meaning that they need not be paid for hours spent on their own in the private quarters) on the theory that [i]n light of the amount of time they spend at the group home, it is in effect a second residence. Id. The government claims that under this interpretation, the maids were not residing in the Sabhnanis' house because they were not provided with a home-like environment with private quarters. Nothing about the FLSA Opinion Letter, however, suggests that it was an interpretation of what it means to reside in [a] household for purposes of § 213(b)(21). Indeed, it is clear in context that the letter is attempting to answer an entirely different question from the one posed by this case: whether an employee with his or her own private residence can also reside at the employer's premises. The letter's answer to this question tells us very little about whether, on the facts of this case, Samirah and Enung, who had nowhere else to go, were employees who resided in the Sabhnani household. Nor does it purport to suggest, at least with regard to domestic service, that it is only when an employee has private quarters separate and apart from the area where he or she works that this employee should be regarded as residing at the employer's premisesa circumstance that, in any event, provides a somewhat arbitrary basis for distinguishing among domestic workers who live in their employers' homes and who argue that they are entitled to overtime pay. The FLSA Opinion Letter thus gives us no cause to doubt our interpretation of § 213(b)(21). For the same reasons, we find the cases relied on by the government that apply the Opinion Letter (again to facts not similar to those in this case) inapposite. See, e.g., Chao v. Jasmine Hall Care Homes Inc., No. 2:05-cv-1306, 2007 WL 4591438, -3 (E.D.Cal. Dec.28, 2007). We therefore vacate the restitution award and remand for recalculation. We note, however, that although § 213(b)(21) prevents the calculation of restitution from being based on an entitlement to overtime, this exemption does not excuse the employer from paying the live-in worker at the applicable minimum wage rate for all hours worked. 29 C.F.R. § 552.102(a). We find for the reasons set forth below that the district court did not abuse its discretion in awarding 24 hours per day's worth of pay for the days on which the Sabhnanis were present in the house, and that the awarding of double damages was proper. Accordingly, the new award need not deviate from those aspects of the original.
Contending that factual issues regarding the appropriate amount of restitution were in dispute, the Sabhnanis sought to examine Samirah and Enung at an evidentiary hearing before the district court to determine, among other things, the number of hours that they worked. The district court denied this request, noting that in their extensive trial testimony, Samirah and Enung had covered substantially all the subjects raised by the Defendants in their objections to the proposed restitution. United States v. Sabhnani, 566 F.Supp.2d 139, 146 (E.D.N.Y.2008) (District Court restitution opinion). On appeal, the Sabhnanis argue that the district court's failure to hold an evidentiary hearing permitted the government to obtain a restitution award without proving the correct amount of loss and deprived the defendants of their ability to challenge the government's calculations. We disagree. We have noted, in the context of contested issues regarding the propriety of a restitution award, that the sentencing procedures employed to resolve such disputes are within the district court's discretion so long as the defendant is given an adequate opportunity to present his position: [T]he district court is not required, by either the Due Process Clause or the federal Sentencing Guidelines, to hold a full-blown evidentiary hearing in resolving sentencing disputes.... All that is required is that the court afford the defendant some opportunity to rebut the Government's allegations. United States v. Maurer, 226 F.3d 150, 151-52 (2d Cir. 2000) (per curiam) (quoting United States v. Slevin, 106 F.3d 1086, 1091 (2d Cir. 1996)) (internal quotation marks omitted). In Maurer, we concluded that the district court did not abuse its discretion in failing to hold an evidentiary hearing, observing that the trial record shed substantial light on the issues in dispute, and that the district court provided the defendant with multiple opportunities to make arguments regarding the award. Id. at 152. Here, the trial testimony made very clear that so long as the Sabhnanis were present, none of the maids' time was truly their own. Both Samirah and Enung offered unrefuted testimony that they performed household work between 4:00 a.m. and late at night seven days a week. The evidence also established that Varsha sometimes gave out tasks that required the whole night to accomplish. Samirah testified that she was deprived of sleep, sometimes sleeping only two hours in a 24-hour period. Samirah testified that she never left the house alone, and Enung testified that she didn't dare leave the house due to Varsha's threats. Tr. 3188. Neither testified that any of their time, apart from the periods during which the Sabhnanis left the country for the summer, was free from responsibility. The Sabhnanis, contrary to their position here, were not denied an opportunity to challenge the government's proposed calculation of the restitution award. In addition to considering sentencing memoranda, the district court held a hearing on July 11, 2008 at which the issue of restitution was addressed. At this hearing, the defendants were not permitted to examine the maids, but they did cross examine the government's witness from the Department of Labor who performed the calculations on which the government based its proposed award. The Sabhnanis thus had ample occasion to challenge this witness's knowledge of the facts of the case and the basis for his figures. We conclude that the defendants were afforded an adequate opportunity to argue [their] position and that the district court did not abuse its discretion in declining to hold a full evidentiary hearing. Maurer, 226 F.3d at 152. In determining the number of hours worked by a live-in worker, the employee and the employer may exclude, by agreement between themselves, the amount of sleeping time, meal time and other periods of complete freedom from all duties. 29 C.F.R. § 552.102(a). Here, the trial record established that there was no agreement between the Sabhnanis and the maids as to periods of free time. To the contrary, the testimony was that at no time were Samirah and Enung afforded periods of complete freedom from all duties when the employee may either leave the premises or stay on the premises for purely personal pursuits. Id. The trial testimony further demonstrated that the maids did not habitually get a reasonable night's sleep; in such cases, Department of Labor regulations suggest that the entire [sleeping] period should be counted towards the number of hours worked. 29 C.F.R. § 785.22. The district court did not err, much less abuse its discretion, in concluding that the trial record shed substantial light on the number of hours worked and that a full hearing was unnecessary.
Pursuant to 29 U.S.C. § 216(b), the district court calculated a net back pay figure for each of the maids and then doubled this figure to arrive at each maid's total award. Section 216(b) of the FLSA provides that [a]ny employer who violates [§§ 206 and 207] ... shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages. 29 U.S.C. § 216(b). The Sabhnanis argue that the § 216(b) liquidated damages provision does not apply to restitution awards under 18 U.S.C. § 1593. We disagree. Section 1593 provides that a sentencing court shall order restitution in the full amount of the victim's losses, which the statute defines to 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(b)(3). The question here is whether § 216(b)'s provision for liquidated damages counts as part of the value of the victim's labor as guaranteed under the minimum wage and overtime guarantees of the Fair Labor Standards Act. Id. We think it does. Three points are significant about the statutory language. First, § 1593's reference to FLSA does not limit the minimum wage and overtime guarantees that determine the value of the victim's labor solely to §§ 206 and 207, the specific provisions of FLSA setting out the definitions of minimum wage and overtime and when they apply. This suggests that statutory provisions other than §§ 206 and 207 are relevant in determining what FLSA's minimum wage and overtime guarantees are. [18] Second, § 216(b)'s double damages provision is triggered automatically by a violation of §§ 206 or 207, so that an employer who violates these provisions  shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation ... and in an additional equal amount as liquidated damages. 29 U.S.C. § 216(b) (emphasis added). Third, § 216(b) is explicitly and exclusively tied to violations of the minimum wage and overtime rules in §§ 206 and 207. These points strongly suggest to us that the value of the victim's labor as guaranteed under the minimum wage and overtime guarantees [of FLSA], for the purposes of 18 U.S.C. § 1593, includes the liquidated damages mandated by § 216. The Sabhnanis have one principal argument to the contrary. Section 260 of FLSA provides that when an employer shows that the conduct giving rise to a FLSA violation was undertaken in good faith and that he had reasonable grounds for believing that his conduct was not unlawful, the court may, in its sound discretion lessen or dispense with the liquidated damages award. 29 U.S.C. § 260. Based on this provision, the Sabhnanis contend that a liquidated damages award is not part of the value of the victim's labor that FLSA guarantees, but is in the nature of a penalty imposed on some employers for willful non-compliance. This argument is without merit. As we have said with regard to FLSA's liquidated damages provision in the past, [l]iquidated damages are not a penalty exacted by the law, but rather compensation to the employee occasioned by the delay in receiving wages due caused by the employer's violation of the FLSA. Herman v. RSR Sec. Servs. Ltd., 172 F.3d 132, 142 (2d Cir.1999); see also Brooklyn Savings Bank v. O'Neil, 324 U.S. 697, 707, 65 S.Ct. 895, 89 L.Ed. 1296 (1945) (noting that FLSA's liquidated damage provision is not penal in nature but constitutes compensation for the retention of a workman's pay which might result in damages too obscure and difficult of proof for estimate); Overnight Motor Transp. Co. v. Missel, 316 U.S. 572, 583-84, 62 S.Ct. 1216, 86 L.Ed. 1682 (1942) (same). The possibility that a judge may in narrow circumstances relieve an employer of its obligation to pay alters neither Section 216's general command that liquidated damages be paid nor our repeated recognition that these damages count as compensation. See Reich v. S. New England Telecomms. Corp., 121 F.3d 58, 71 (2d Cir.1997) (noting that FLSA's liquidated damages are considered compensatory rather than punitive); see also Herman, 172 F.3d at 142 (double damages [are] the norm and single damages the exception). Finally, the defendants argue, citing Brock v. Superior Care, Inc., 840 F.2d 1054 (2d Cir.1988), that they are entitled to a jury trial before liquidated damages may be awarded. In Brock, this Court determined that in suits by the Secretary of Labor or an employee for back wages and liquidated damages under 29 U.S.C. §§ 216(b) and (c), an employer is entitled to a jury trial on the issue of the amount of back pay due pursuant to the Seventh Amendment. Brock, 840 F.2d at 1063 (citing Lorillard v. Pons, 434 U.S. 575, 580 & n. 7, 98 S.Ct. 866, 55 L.Ed.2d 40 (1978)). Suffice it to say that the issue of whether an employer has a Seventh Amendment right to a jury in a civil case in which an employee or the government is seeking back pay and liquidated damages is analytically distinct from the question whether a criminal defendant who is required by statute to pay restitution is entitled to a jury trial under the Sixth Amendment on the amount of restitution due. This court has already held that the answer to the latter question is no in the context of awards made pursuant to other restitution statutes. See United States v. Tin Yat Chin, 476 F.3d 144, 147 (2d Cir.2007); United States v. Reifler, 446 F.3d 65, 118-19 (2d Cir.2006). We see no reason why these decisions should not apply here. For these reasons, the award of liquidated damages was proper. On remand, in calculating the new restitution award, the district court may award liquidated damages pursuant to FLSA § 216.