Kim v. Lee ( 2023 )

22-61
Kim v. Lee
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT.
CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS
PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A
SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY
MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE
(WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING TO A
SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT
REPRESENTED BY COUNSEL.
At a stated term of The United States Court of Appeals for the Second Circuit,
held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of
New York, on the 2nd day of March, two thousand twenty-three.
PRESENT:
DENNIS JACOBS
DENNY CHIN,
BETH ROBINSON,
Circuit Judges.
_________________________________________
MOONSUNG KIM,
Plaintiff-Appellant,
v. No. 22-61
DIANE H. LEE, THE LAW OFFICES OF DIANE H. LEE, THE
KOREA CENTRAL DAILY NEWS, INC., AKA THE KOREA DAILY
NEW YORK, JOONG-ANG DAILY NEWS CALIFORNIA, INC., *
Defendants-Appellees.
* The Clerk of Court is directed to amend the caption of the case as set forth above.
_________________________________________
FOR PLAINTIFF-APPELLANT: Ryan J. Kim, Ryan Kim Law, P.C., Fort
Lee, NJ.
FOR DEFENDANTS-APPELLEES LEE & ROBERT M. PETTIGREW, White and
THE LAW OFFICES OF DIANE H. LEE: Williams LLP, Newark, NJ.
FOR DEFENDANTS-APPELLEES GALEN C. BAYNES (Louis Pechman, on
THE KOREA CENTRAL DAILY NEWS & the brief), Pechman Law Group PLLC,
JOONG-ANG DAILY NEWS CALIFORNIA: New York, NY.
Appeal from a judgment of the United States District Court for the
Southern District of New York (Liman, Judge).
UPON DUE CONSIDERATION WHEREOF, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the judgment of the District Court is
AFFIRMED.
Plaintiff-Appellant Moonsung Kim appeals from a judgment entered on
December 22, 2021, in the United States District Court for the Southern District of
New York (Liman, J.) dismissing his retaliation claims for failure to state a claim.
We assume the parties’ familiarity with the underlying facts, procedural history,
and arguments on appeal, to which we refer only as necessary to explain our
decision to affirm.
Kim alleges that while working for The Korea Central Daily News, Inc.
(“KCD”), he was not paid for certain overtime hours. Kim sued KCD and its
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parent company Joong-Ang Daily News California, Inc. (together, the “KCD
Defendants”) under the Fair Labor Standards Act ("FLSA”) and New York Labor
Law (“NYLL”) seeking payment of those wages. See Lee v. Korea Central Daily
News, Inc., No. 2018-cv-3799 (E.D.N.Y.) (the “Wage Case”). He alleges that during
the course of that litigation, attorney Diane Lee, while serving as outside counsel
for the KCD Defendants, repeatedly asked Kim threatening questions in his
deposition about his keeping copies of documents belonging to KCD following his
employment. He also alleges that, at the direction of KCD Defendants, counsel
filed frivolous counterclaims against him for retaining copies of files from KCD
after the termination of his employment. 1
Kim filed this separate action for retaliation under the FLSA and NYLL
against Defendants-Appellees Diane H. Lee and the Law Offices of Diane H. Lee
(together, “Lee Defendants”), and the KCD Defendants. See 29 U.S.C. §§ 215(a)(3),
1 After Kim’s deposition on August 21, 2020, KCD amended its answer to assert three
counterclaims for (1) breach of fiduciary duties, (2) theft and misappropriation of confidential
information, and (3) breach of contract. Wage Case, Dkt. 22. At a subsequent conference, the
magistrate judge ruled, in essence, that the answer was not properly filed and directed KCD to
move for leave to file an amendment. Wage Case, Dkt. 37 at 23–26. After KCD filed a motion to
assert the three counterclaims, the magistrate judge recommended that the motion be granted
as to the first counterclaim but denied as to the second and third counterclaims for lack of
supplemental jurisdiction. Wage Case, Dkt. 38 at 10–14. The district court adopted the
recommendations. Wage Case, Dkt. 39. Although KCD’s motion to amend was denied as to the
second and third counterclaims, for purposes of this action, we consider whether their mere
filing was retaliatory.
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216(b); N.Y. Lab. Law § 215. He contends that because the deposition questions
and attempted counterclaims against him were objectively baseless, the KCD
Defendants and the Lee Defendants are liable for unlawful retaliation. The district
court dismissed Kim’s retaliation claims concluding that Lee’s deposition
questions and the counterclaims in the Wage Case were not objectively baseless.
Kim v. Lee, 576 F. Supp. 3d 14, 32 (S.D.N.Y. 2021). The district court also rejected
Kim’s argument that the Lee Defendants were “employers” for purposes of his
unlawful retaliation claim against the Lee Defendants. Id. at 26.
On appeal, Kim contends that he alleged actionable retaliatory conduct; in
particular, he argues that the deposition questioning was threatening and
retaliatory, and his employer’s counterclaims against him for theft and breach of
contract were retaliatory and objectively baseless. We disagree. Kim’s allegations
fail to establish that the Defendants’ litigation conduct constituted unlawful
retaliation because the deposition questions fell within the scope of permissible
deposition examination, and the counterclaims were not objectively baseless. 2
2 Because we affirm the district court’s judgment on other grounds, we need not consider Kim’s
alternative argument that the district court erred in concluding that the Lee Defendants could
not be liable for retaliation under the FLSA or the NYLL because they were not Kim’s
employers.
4
We review the grant of the Defendants’ motion to dismiss without deference
to the district court, “accepting all factual allegations in the complaint as true, and
drawing all reasonable inferences in the plaintiff’s favor.” City of Pontiac Gen.
Emps. Ret. Sys. v. MBIA, Inc., 637 F.3d 169, 173 (2d Cir. 2011). 3
To establish retaliation under the FLSA the plaintiff must show
“(1) participation in protected activity known to the defendant, like the filing of an
FLSA lawsuit; (2) an employment action disadvantaging the plaintiff; and (3) a
causal connection between the protected activity and the adverse employment
action.” Mullins v. City of New York, 626 F.3d 47, 53 (2d Cir. 2010). 4 The district
court concluded, and the KCD Defendants do not contest, that Kim satisfied the
first prong by filing the Wage Case. The contested issue on appeal is whether Kim
has satisfied the second prong by sufficiently alleging an employment action
disadvantaging him.
3In quotations from caselaw and the parties’ briefing, this order omits all internal quotation
marks, alterations, footnotes, and citations, unless otherwise noted.
4 The parties treat the analysis under the NYLL as coextensive with our analysis under the
FLSA and have not independently briefed any arguments under the NYLL. We accordingly
assume without deciding that our disposition of the retaliation claims under the FLSA is
dispositive of the NYLL claims as well.
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1. The Wage Case Counterclaims
Kim argues that in evaluating whether the counterclaims against him were
frivolous, the district court erred in considering matters outside of the pleadings—
namely his deposition testimony from the Wage Case that was appended to
defendants’ motion to dismiss. He further contends that the theft and breach of
contract counterclaims were frivolous on their face. We disagree on both points.
The district court did not err in considering and relying on the deposition
testimony. Kim quotes directly from the deposition transcript in his Complaint,
and his claims are based in large part on the deposition questioning. In reviewing
a motion to dismiss, “we may consider any written instrument attached to [the
Complaint] as an exhibit or any statements or documents incorporated in it by
reference . . . and documents that the plaintiffs either possessed or knew about and
upon which they relied in bringing the suit.” City of Pontiac Policemen’s & Firemen’s
Ret. Sys. v. UBS AG, 752 F.3d 173, 179 (2d Cir. 2014).
And we conclude that Kim failed to allege sufficient facts to support his
claim that the counterclaims filed against him constituted actionable adverse
conduct. Under the FLSA, an employment action disadvantages a plaintiff, and
thus satisfies the second prong of the three-part test for retaliation, if “it well might
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have ‘dissuaded a reasonable worker from making or supporting similar
charges.’” Mullins, 626 F.3d at 53 (quoting Burlington N. & Santa Fe Ry. Co., 548
U.S. at 68).
Although this Court has not previously addressed the question in a
precedential decision, district courts in this Circuit have held that “baseless claims
or lawsuits designed to deter claimants from seeking legal redress constitute
impermissibly adverse retaliatory actions, even though they do not arise strictly
in an employment context.” Romero v. Bestcare, Inc., No. 15-cv-7397 (JS)(GRB), 2018
WL 1702001, at *5 (E.D.N.Y. Feb. 28, 2018), report and recommendation adopted, 2018
WL 1701948 (E.D.N.Y. Mar. 31, 2018) (citing cases). We assume, without deciding,
that frivolous counterclaims could well dissuade a reasonable worker from
pursuing an FLSA claim. See Torres v. Gristede’s Operating Corp., 628 F. Supp. 2d
447, 473 (S.D.N.Y. 2008) (noting that “[b]ad faith or groundless counterclaims and
other legal proceedings against employees who assert statutory rights are
actionable retaliation precisely because of their [threatening] effect”).
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The critical question is whether any of the KCD Defendants’ counterclaims
are “baseless.” 5 To be baseless, a counterclaim must “[h]av[e] no basis in fact or
sound reason.” Baseless, Black’s Law Dictionary (11th ed. 2019). A claim is frivolous
if it is based on an “inarguable legal conclusion” or “fanciful factual allegation.”
Pillay v. INS, 45 F.3d 14, 16 (2d Cir. 1995) (quoting Nietzke v. Williams, 490 U.S. 319,
325–28 (1989) (recognizing the distinction between claims that fail on the merits
and those that are frivolous)).
Kim has not plausibly alleged that the factual allegations in the challenged
counterclaims are frivolous. In his Complaint, Kim admits that he took the
documents while an employee of the KCD Defendants. The allegations in Kim’s
Complaint do not contradict the KCD Defendants’ counterclaim allegations that
the documents Kim retained included confidential or proprietary information,
that he lacked permission to take the documents, and that he took them without
5 Kim argues only that the KCD Defendants’ counterclaims are objectively baseless and does
not contend that even if the KCD Defendants’ counterclaims were non-frivolous, they still
constitute unlawful retaliation. For that reason, we need not decide whether and under what
circumstances a non-frivolous counterclaim may constitute unlawful retaliation under section
215(a)(3). See Nunez v. Metro. Learning Inst., Inc., No. 18-CV-1757(EK)(VMS), 2021 WL 1176219,
at *5 (E.D.N.Y. Mar. 29, 2021) (noting that whether a non-frivolous lawsuit may qualify as
actionable retaliation under the FLSA is an open question in the Second Circuit).
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his employer’s knowledge. 6 And Kim does not dispute that he signed a non-
disclosure agreement. Given these allegations, Kim has not plausibly alleged,
other than in conclusory terms, that the KCD Defendants’ breach of contract claim
was frivolous.
Likewise, Kim has not plausibly alleged that the KCD Defendants’
counterclaim for theft and misappropriation of confidential information was
frivolous. We reject Kim’s argument that the district court erred in construing the
counterclaim for “theft” as a claim for “conversion.” The New York Court of
Appeals has described “conversion” as a civil cause of action in response to a theft.
See, e.g., State v. Seventh Regiment Fund, Inc., 98 N.Y.2d 249, 261 (2002) (noting that
an owner “who belatedly discovers the theft of a possession would rather sue a
bona fide purchaser—against whom the conversion cause of action accrues upon
demand and refusal—than a thief . . . “ (emphasis added) (citing Solomon R.
Guggenheim Found. v. Lubell, 77 N.Y.2d 311, 318 (1991))).
6 Kim broadly states that he has alleged that the counterclaims “have no merit, even if he has
not specifically denied each of the allegations in the [c]ounterclaims,” and notes that he never
filed an answer to the counterclaims because the “court in the Wage Case held that [they] could
not be filed.” Appellant’s Br. at 31–32. However, the purpose of the Complaint is to plead a
claim on which relief can be granted—if a plaintiff fails to do so, dismissal is proper. See Fed. R.
Civ. P. 12(b)(6). Other than generally alleging that the counterclaims were “groundless,” and
had no merit—both legal conclusions—Kim did not plausibly allege any facts contradicting the
factual basis for the counterclaims.
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And we likewise reject Kim’s contention that the counterclaim for
conversion was frivolous because a claim for conversion does not lie under New
York law for the copying of electronic files not to the exclusion of the rightful
owner. Kim may ultimately be right that a claim for conversion does not apply
where a defendant takes copies of documents but does not interfere with the
rightful owner’s possession of the documents. See Colavito v. N.Y. Organ Donor
Network, Inc., 8 N.Y.3d 43, 49–50 (2006) (“A conversion takes place when someone,
intentionally and without authority, assumes or exercises control over personal
property belonging to someone else, interfering with that person’s right of possession.”
(emphasis added)); see also, e.g., Fischkoff v. Iovance Biotherapeutics, Inc., 339 F. Supp.
3d 408, 414–15 (S.D.N.Y. 2018) (holding that copying data without interfering with
rightful owner’s access to the data does not constitute conversion under New York
law).
However, the district court cited two federal district court decisions and one
New York state trial decision suggesting that the copying of data may constitute
conversion under New York Law. Kim, 576 F. Supp. 3d at 33 (citing Clark St. Wine
& Spirits v. Emporos Sys. Corp., 754 F. Supp. 2d 474, 484 (E.D.N.Y. 2010)); Astroworks,
Inc. v. Astroexhibit, Inc., 257 F. Supp. 2d 609, 618 (S.D.N.Y. 2003); and N.Y. Racing
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Ass'n v. Nassau Regional Off-Track Betting Corp., 909 N.Y.S.2d 866, 870–71 (Sup. Ct.
Nassau Cty. 2010)). The New York Court of Appeals has not issued a controlling
decision on this question, and we agree with the district court that the KCD
Defendants’ conversion claim may rest on, at a minimum, “a nonfrivolous
argument for extending, modifying, or reversing existing law or for establishing
new law.” Kim, 576 F. Supp. 3d at 33.
2. The Deposition Questions
We likewise agree with the district court that attorney Lee’s questioning
during the deposition did not constitute an actionable adverse employment
action. Examinations at a deposition proceed as they would at trial and can
cover “any nonprivileged matter that is relevant to any party’s claim or defense.”
Fed. R. Civ. P. 30(c), 26(b)(1). Lee’s questions concerning how and why Kim was
still in possession of documents belonging to his former employer were within
the scope of permissible discovery, and her inquiries about whether he
understood his keeping the documents to be improper or criminal were
potentially germane to his credibility and conduct during his prior employment.
* * *
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We have considered the remainder of Kim’s arguments and conclude that
they are without merit. Accordingly, we AFFIRM the order of the district court.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk of Court
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