18-3580
Lin v. Shanghai City Corp.

                                             In the
                     United States Court of Appeals
                                             for the
                                     Second Circuit
                                        August Term, 2019

     (Argued: November 4, 2019                          Decided:   February 11, 2020)

                          Docket No. 18‐3580‐cv
________________________________________________________________________

                             JIAN YANG LIN, HUI QUI CHEN, AND XIN HE,

                                       Plaintiffs‐Appellants,

                                                v.

 SHANGHAI CITY CORP D/B/A JOE’S SHANGHAI, SHANGHAI DUPLICATE CORP. D/B/A
  JOE’S SHANGHAI, KIU SANG SI A/K/A JOSEPH SI, TUN YEE LAM A/K/A PETER LAM,
                   WILLIAM KO, YUN CAI, AND JOHN ZHANG,

                                       Defendants‐Appellees,

             SOLOMON C. LIU, MIMI SI, LILLIAN LIOU, AND CHENG KUENG LIU,

                                           Defendants.*

                 Appeal from the United States District Court
              for the Southern District of New York (Caproni, J.)
                                No. 18‐cv‐1715
________________________________________________________________________

* The Clerk of Court is respectfully requested to amend the caption as stated above.
Before:
              SACK, HALL, Circuit Judges, and Rakoff,† District Judge.


       Appeal from a judgment of the United States District Court for the Southern
District of New York (Caproni, J.) granting summary judgment to Defendants. We hold
that Plaintiffs had reason to recognize the motion could be converted into one for
summary judgment and that the District Court appropriately applied Federal Rule of
Civil Procedure 41(a)(1)(B), dismissing the complaint based on Plaintiffs’ two prior
voluntary dismissals in New York State court and in the Eastern District of New York.
AFFIRMED.



                                          AARON B. SCHWEITZER, C. Douglass Thomas,
                                          John Troy (on the brief)
                                          Troy Law, PLLC, Flushing, NY
                                          for Plaintiff‐Appellant.

                                          DAVID B. HOROWITZ, Fong & Wong, P.C.,
                                          New York, NY, for Defendant‐Appellee.



PER CURIAM:

       Plaintiffs‐Appellants, three kitchen workers formerly employed at three New York

City restaurants operating under the name Joe’s Shanghai contend that Defendants’

wage‐and‐hour practices and policies violated the Fair Labor Standards Act (FLSA), the

New York Labor Law (NYLL), the New York General Business Law (NYGBL), and 26

U.S.C. § 7434. The District Court treated Defendants‐Appellees’ opposition to Plaintiffs‐

Appellants’ motion for conditional collective certification as a cross‐motion for summary



† Judge Jed S. Rakoff, of the United States District Court for the Southern District of
New York, sitting by designation.

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judgment as to Plaintiffs‐Appellants Lin, Chen, and He, and as a motion to dismiss

without prejudice as to putative opt‐in plaintiffs Mendez, Flores, and Guerrero.      The

District Court granted summary judgment for Defendants‐Appellees against Lin, Chen,

and He, holding that Plaintiffs‐Appellants’ lawsuit was barred by Federal Rule of Civil

Procedure 41(a)(1)(B) (the “two dismissal rule”) and dismissed without prejudice as to

Mendez, Flores, and Guerrero.      Because the District Court properly considered the

motion as one for summary judgment and because the two prior actions Plaintiffs‐

Appellants had filed against Defendants‐Appellees were “based on or includ[ed] the

same claim,” FRCP 41(a)(1)(B), we affirm.

      Over the last three years, Plaintiffs‐Appellants have initiated three lawsuits

against Defendants‐Appellees and participated in another.        The litigation began in

October 2016, when two former Joe’s Shanghai employees brought a collective action in

the Eastern District of New York (the EDNY I Action) against a group of corporate and

individual defendants which included many of the defendants named here.          See Jin v.

Shanghai Original, Inc., No. 16‐cv‐5633 (E.D.N.Y.).   The plaintiffs in the EDNY I Action

alleged that the defendants’ wage and hour practices violated the FLSA and the NYLL.

In August 2017, all three Plaintiffs‐Appellants in this case – Lin, Chen, and He – filed

notices of consent to join the putative EDNY I Action.       The EDNY I court granted

conditional class certification to employees of the Joe’s Shanghai restaurants in Flushing

and Midtown but denied certification to employees of the Chinatown location while also

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denying the EDNY I plaintiffs’ motion for leave to amend their complaint to add Lin,

Chen, and He as named co‐plaintiffs.

       Shortly thereafter, Lin, Chen, and He filed suit in the New York Supreme Court

for New York County (the NYS Action). Their state court complaint asserted claims for

an assortment of NYLL and NYGBL violations and made factual allegations substantially

similar to those made in the present action.        The complaint named the same defendants

named here.     On February 9, 2018, Plaintiffs‐Appellants voluntarily dismissed the entire

action with prejudice.1

       That same day, Plaintiffs‐Appellants filed a new action in the Eastern District of

New York (the EDNY II Action), again alleging the same NYLL and NYGBL violations

against the same defendants based on the same set of factual allegations.              Plaintiffs‐

Appellants also added two FLSA causes of action and a claim under 26 U.S.C. § 7434, the

same causes of action pursued in the court below. Plaintiffs‐Appellants dismissed that

action just days after filing it because, among other reasons, “they realized venue would

be improper in the Eastern District[.]” Plaintiffs‐Appellants’ Br. at 10.

       Finally, Plaintiffs‐Appellants filed the instant action on February 25, 2018, a few

days after dismissing the EDNY II Action.       The complaints are virtually identical.      This



1Plaintiffs‐Appellants now argue that they did not intend to discontinue the NYS Action with
prejudice. Even assuming arguendo that the dismissal of the NYS Action was without
prejudice, the future preclusive effect of such a dismissal is irrelevant for the application of
Federal Rule of Civil Procedure 41(a)(1)(B).

                                                4
action is based on the same operative facts and names the same defendants (Appellees

here) as did the NYS and EDNY II Actions and also includes the same legal claims as

asserted in the EDNY II Action.

       On June 14, 2018, Plaintiffs‐Appellants once again moved to voluntarily dismiss

the complaint, this time only as to certain defendants who were defendants in the EDNY

I Action, which was still ongoing.   In response, the next day, Defendants‐Appellees filed

a letter with the court requesting that the complaint be dismissed with prejudice pursuant

to Federal Rule of Civil Procedure 41.    On June 19, the District Court entered a memo

endorsement dismissing the four defendants as Plaintiffs‐Appellants had requested but

ordering the parties to brief “whether such dismissals should be with or without

prejudice” as part of the anticipated motion for conditional certification.   A91‐92.

       Plaintiffs‐Appellants filed a motion for conditional collective certification on June

28, 2018, and argued in their supporting memorandum of law that the NYS Action and

the EDNY II Action “[did] not advance the same claims.” Defendants‐Appellees filed a

memorandum of law in opposition to the motion, arguing that the entire action should

be dismissed with prejudice under FRCP 41(a)(1)(B). In their reply memorandum of law

supporting certification, Plaintiffs‐Appellants also argued that the inclusion of the

putative opt‐in plaintiffs made the NYS and EDNY II Actions sufficiently different so as

not to fall within a “strict construction” of Rule 41. A436‐38.




                                             5
       On October 26, 2018, while considering the motion for class certification, the

District Court entered an order informing the parties that it intended to treat Defendants‐

Appellees’ opposition to Plaintiffs‐Appellants’ motion for conditional certification as a

cross‐motion for summary judgment as to Lin, Chen, and He, and a motion to dismiss

without prejudice as to putative opt‐in plaintiffs Mendez, Flores, and Guerrero.           The

District Court invited the parties to submit any additional information pertinent to the

motion; neither party took advantage of the offer.       Seven days later, the District Court

filed its opinion and order granting summary judgment to Defendants‐Appellees on all

claims asserted by Lin, Chen, and He, and dismissing without prejudice the claims made

by Guerrero, Flores, and Mendez.

                                               I.

       “District courts have the discretion to grant summary judgment sua sponte, even

without notice in certain circumstances.” Schwan‐Stabilo Cosmetics GmbH & Co. v.

Pacificlink Intern. Corp., 401 F.3d 28, 33 (2d Cir. 2005); see also FRCP 56(f)(1) (“After giving

notice and a reasonable time to respond, the court may . . . grant summary judgment for

a nonmovant.”).     When doing so, however, they must take care “to determine that the

party against whom summary judgment is rendered has had a full and fair opportunity

to meet the proposition that there is no genuine issue of material fact to be tried, and that

the party for whom summary judgment is rendered is entitled thereto as a matter of law.”

Ramsey v. Coughlin, 94 F.3d 71, 73‐74 (2d Cir. 1996) (quotation marks and citation omitted).

                                               6
“The essential inquiry when such a conversion is challenged […] is not whether formal

notice was served, but whether, based on the facts and circumstances of the particular

case, the opposing party should reasonably have recognized the possibility that the

motion might be converted into one for summary judgment or was taken by surprise and

deprived of a reasonable opportunity to meet facts outside the pleadings.” Villante v.

Dep’t of Corr., 786 F.2d 516, 521 (2d Cir. 1986) (internal quotation omitted).   We review

the District Court’s grant of summary judgment de novo.       E.g., Biondo v. Kaledia Health,

935 F.3d 68, 73 (2d Cir. 2019).

       Here, Plaintiffs‐Appellants had ample opportunity to argue that Rule 41(a)(1)(B)

should not apply in this case. They were on notice of the Rule 41 issue when Appellees

filed their letter in opposition to Plaintiffs‐Appellants’ Notice of Voluntary Dismissal on

June 15, 2018. That letter argued that Plaintiffs‐Appellants were barred in their entirety

by Rule 41(a)(1)(B) from pursuing their claims and that the action should have been

dismissed with prejudice. See Kennedy v. Empire Blue Cross & Blue Shield, 989 F.2d 588,

592 (2d Cir. 1993) (holding that motion papers that seek dismissal on grounds that may

lead to entry of summary judgment can constitute notice for purposes of a sua sponte

conversion). On June 19, the District Court asked both sides for additional briefing on

“whether such dismissals should be with or without prejudice.” A92. In their amended

brief for conditional certification, Plaintiffs‐Appellants devoted a section to an argument

that Rule 41(a)(1)(B) did not apply because the NYS and EDNY II Actions did not advance

                                             7
the same claims. Plaintiffs‐Appellants spilled additional ink making this argument on

reply, while also arguing that the inclusion of the putative opt‐in plaintiffs created

sufficient differences between the NYS Action and the EDNY II Action such that they do

not fall within a “strict construction” of Rule 41.      A436‐38.    Both of these filings

afforded Plaintiffs‐Appellants “reasonable opportunit[ies]” to present argument on the

issue which became the basis of the District Court’s decision. Villante, 786 F.2d at 521.

       Further, the District Court provided adequate notice that it was considering

Defendants‐Appellees’ opposition to the motion for conditional certification as a cross‐

motion for summary judgment.        The court invited Plaintiffs‐Appellants to submit any

additional information they deemed appropriate. The Plaintiffs‐Appellants chose not

to do so.   Nor did Plaintiffs‐Appellants file a request for more time to provide additional

information.    “[B]ased on the facts and circumstances of the particular case, [Plaintiffs‐

Appellants] should reasonably have recognized the possibility that the motion might be

converted into one for summary judgment[.]” Villante, 786 F.2d at 521 (internal quotation

marks omitted).

                                             II.

       Plaintiffs‐Appellants’ only remaining argument2 is that their state‐court complaint

does not assert the FLSA claims that they asserted in federal court, and that the cases are


2Plaintiffs‐Appellants argue for the first time on appeal that their dismissal of the
EDNY II Action was involuntary. They claim that they had to dismiss the suit because

                                             8
therefore different for purposes of Rule 41(a)(1)(B). Rule 41, however, does not require

that the two prior dismissals be of cases asserting identical claims. A second voluntary

dismissal under Rule 41(a)(1)(B) shall be with prejudice so long as the plaintiff’s prior

action was “based on or includ[ed] the same claim.” FRCP 41(a)(1)(B). The few circuits

to have considered this issue have analogized the two‐dismissal rule to the doctrine of

res judicata, which bars a plaintiff from re‐litigating a matter that has already been

decided by another court, even when the plaintiff is asserting different legal claims or

causes of action.   Commercial Space Mgmt. Co. v. Boeing Co., 193 F.3d 1074, 1080 (9th Cir.

1999) (comparing a Rule 41(a)(1) determination to res judicata); Manning v. S.C. Dep’t of

Highway & Pub. Transp., 914 F.2d 44, 47 (4th Cir. 1990) (applying Rule 41(a)(1) as res

judicata). Similarly, we hold that a second action is “based on or includ[es] the same

claim” for purposes of Rule 41(a)(1)(B) whenever it arises from the same transaction or

occurrence as the first action.   Here, although the complaint in federal court included

federal causes of action not pled in state court, both actions arose from the same set of

facts and all of Plaintiffs‐Appellants’ additional claims either were or could have been

raised in state court.   As aptly noted by the District Court, to hold otherwise would




venue would have been improper and because it duplicated the class portion of the
EDNY I Action. These arguments are waived, and we need not consider them. See
Greene v. United States, 13 F.3d 577, 586 (2d Cir. 1994) (“[I]t is a well‐established general
rule that an appellate court will not consider an issue raised for the first time on
appeal.”).

                                              9
allow a plaintiff to evade enforcement of the two‐dismissal rule by simply adding a new

cause of action to the same set of facts.

       We have considered Plaintiffs‐Appellants’ remaining arguments and find them to

be without merit.   Accordingly, we AFFIRM the judgment of the District Court.




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