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Braxton v. Eldorado Lounge, Inc.

United States District Court, D. Maryland

October 27, 2017

MAURLANNA BRAXTON et al., Plaintiffs,
v.
ELDORADO LOUNGE, INC. et al., Defendants.

          MEMORANDUM OPINION

          Ellen Lipton Hollander United States District Judge.

         In a Second Amended Complaint (ECF 28), plaintiffs Maurlanna Braxton, Brittany Scott, Stephanie Gamble, and Brionna Williams, on behalf of themselves and others similarly situated, filed a wage action against two Baltimore nightclubs at which they previously worked: Eldorado Lounge, Inc. (“El Dorado”) and Four One Four LLC, doing business as Kings & Diamonds (“Kings & Diamonds”) (collectively, the “Corporate Defendants”).[1] They also sued defendant Kenneth Jackson, who owns El Dorado and holds a one-half ownership interest in Kings & Diamonds. ECF 28 at 1; ECF 93-2 (Kenneth Jackson deposition) at 3-4.[2]

         In particular, plaintiffs allege violations of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq.; the Maryland Wage and Hour Law (“MWHL”), as amended, Md. Code (2016 Repl. Vol.), §§ 3-401 et seq. of the Labor and Employment Article (“L.E.”); and the Maryland Wage Payment and Collection Law (“MWPCL”), as amended, L.E. §§ 3-501 et seq. In support of their claims, plaintiffs allege that they were employed by defendants as exotic dancers, but were not paid a minimum wage. ECF 28 at 6-7. Rather, they were paid by commission, receiving half the price of the drinks that customers of the clubs bought for them. ECF 93-7 (defendants' responses to interrogatories) at 9.

         Five motions are now pending. Plaintiffs have filed a Motion for Partial Summary Judgment as to defendants' liability and with respect to their affirmative defenses (ECF 93), supported by a memorandum (ECF 93-1) (collectively, “Motion”) and numerous exhibits. The Corporate Defendants responded in opposition (ECF 100), and submitted numerous exhibits. Jackson also opposes the Motion. ECF 101. The Corporate Defendants later amended their opposition. ECF 105. Plaintiffs replied. ECF 109 (“Reply”).

         In addition, plaintiffs filed a “Motion to Strike Response in Opposition to Motion for Summary Judgment, ” seeking to exclude from the Court's consideration the affidavits of two former employees of defendants. ECF 106 (“Motion to Strike Affidavits”). Jackson and the Corporate Defendants oppose the Motion to Strike Affidavits. ECF 110 (Jackson); ECF 111 (Corporate Defendants). Plaintiffs replied. ECF 114.

         The Corporate Defendants submitted a “Motion for Leave to File Response to Plaintiff's Reply to Opposition for Motion for Partial Summary Judgment” (ECF 117), which I shall construe as a motion for leave to file a surreply (“Motion for Surreply”). Plaintiffs oppose the Motion for Surreply. ECF 122. Without leave of court, the Corporate Defendants subsequently filed the Surreply. ECF 126. Thereafter, plaintiffs submitted a Motion to Strike Defendants' Surreply (ECF 127, “Motion to Strike Surreply”), which the Corporate Defendants oppose. ECF 130.

         Jackson has filed a “Motion For Sanctions For Violations Under Federal Rule Of Civil Procedure 11(c), ” lodged against plaintiffs' counsel. ECF 129 (“Motion for Sanctions”). No response was filed.

         No hearing is necessary to resolve the motions. See Local Rule 105.6. For the reasons that follow, I shall grant plaintiffs' Motion in part and deny it in part. I shall also grant plaintiffs' Motion to Strike Affidavits; deny defendants' Motion for Surreply; deny plaintiffs' Motion to Strike Surreply, as moot; and deny Jackson's Motion for Sanctions.

         I. Factual Background

         As noted, plaintiffs worked as exotic dancers and were paid by commission. It is undisputed that they were not paid wages. ECF 93-7 at 8-9. The amount each dancer made from commissions each night was purportedly recorded by the club (id. at 9), and was paid in cash to the dancers the same night. Id. at 18.

         Plaintiffs were also allowed to keep any money they received in tips for dances (ECF 93-2 at 25), and defendants claim the tips were sometimes substantial. Id. at 35. However, plaintiffs were also expected to “tip-in”-to pay some amount at the beginning of the evening that would cover repairs for anything the dancers broke, a DJ, and other related expenses of the clubs. Id. at 34-35. Tip-in at El Dorado seems to have been about $35 (id. at 38), and was assessed at least on the weekends, if not every night. Id. at 34. Plaintiffs allege that in certain circumstances they were required to pay other fees and fines, such as if they left the building during work (ECF 93-3, Declaration of Scott, ¶ 5), or if they wanted the DJ to play specific songs for their dances. ECF 93-6 (Declaration of Braxton), ¶ 4. Defendants dispute these other fees. ECF 93-7 at 20.

         Defendants classified the dancers, including plaintiffs, as independent contractors rather than employees, and plaintiffs signed an “Independent Contractor Employment Agreement.” See ECF 100-4 at 1. The parties dispute whether the dancers were assigned set shifts. See ECF 93-3, ¶ 5; ECF 93-7 at 21.

         Additional facts are included in the Discussion.

         II. Discussion

         In order to determine the evidence within the scope of the Motion, I must resolve whether to consider the two challenged affidavits submitted by the Corporate Defendants. And, I must determine whether to consider the Corporate Defendants' surreply. Therefore, I shall first address the Motion to Strike Affidavits, the Motion for Surreply, and the Motion to Strike Surreply.

         A. Motion to Strike Affidavits

         Plaintiffs have moved to strike two affidavits submitted as exhibits with the Corporate Defendants' opposition to the Motion. The affiants are two of the Corporate Defendants' former bartenders. ECF 100-40 (Affidavit of Kimberly Jones); ECF 100-41 (Affidavit of Tenia Stuckey). In the affidavits, Ms. Stuckey and Ms. Jones discuss the employment process and management structure of the clubs, disputing some elements of plaintiffs' declarations (e.g., that plaintiffs were fined or subject to pre-determined schedules). Id.

         Plaintiffs complain that the witnesses were not disclosed by defendants in response to plaintiffs' interrogatories. Therefore, they insist that the affidavits should not be considered on summary judgment, under Fed.R.Civ.P. 37(c)(1). ECF 106-1 at 1.

         Rule 37(c)(1) provides, in relevant part: “If a party fails to provide information or identify a witness as required by Rule 26(a) or (e), the party is not allowed to use that information or witness to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless.” District courts have broad discretion to decide harmlessness. Wilkins v. Montgomery, 751 F.3d 214, 222 (4th Cir. 2014). The basic purpose of Rule 37(c)(1) is to prevent surprise and prejudice to the opposing party. Southern States Rack and Fixture, Inc. v. Sherwin-Williams Co., 318 F.3d 592, 596 (4th Cir. 2003).

         It is undisputed that defendants did not name the affiants in their response to plaintiffs' interrogatories. Defendants were asked to supply the names of “each person . . . with knowledge regarding the facts and circumstances . . . referred to in the operative Complaint.” ECF 106-2 at 7. Defendants responded with one name: William Shepherd, the co-owner of Kings & Diamonds. Id.[3] Nowhere did defendants identify Ms. Jones or Ms. Stuckey.

         Jackson suggests that disclosure was unnecessary because (1) “Plaintiffs' attorney . . . did or should have discovered the identity of Jones and Stuckey . . . from his clients' recollection of the facts and persons surrounding the allegations of the complaint itself;” and (2) “Plaintiffs identified Kimberly Jones [] and Tenia Stuckey [] during their depositions.” ECF 110 at 3-4. The Corporate Defendants make the same arguments. ECF 111 at 3.

         As to the first argument, even if plaintiffs were aware of other witnesses, this does not excuse defendants from properly answering the interrogatory. See C. Wright & A. Miller, 8 Fed. Prac. & Proc. Civ. § 2014 (3d ed.) (discussing discovery obligations in matters already known to the requesting party). The second argument-that the affiants had already been identified by the plaintiffs themselves-strains credulity. Defendants cite the depositions of Scott and Braxton, in which they mention that they had dealt with a bartender named “Jamilla.” ECF 110-3 at 6-7, 20.

         Braxton was asked: “[D]oes Jamilla have a last name to the best of your knowledge?” She answered: “No.” ECF 110-3 at 20. According to defendants, “Jamilla” is a nickname for Tenia Stuckey. ECF 110 at 4. Defendants never explain why plaintiffs would have known that Jamilla is actually Tenia Stuckey.

         Defendants' argument that plaintiffs identified Kimberly Jones is equally unpersuasive. They cite to the deposition of plaintiff Gamble and claim she alluded to Jones. ECF 111 at 3. In that deposition, ECF 110-3 at 14, Gamble was asked if someone inspected her nails and hair. Gamble answered in the affirmative. Then, she was asked: “And who was that?” Gamble responded: “Uh, what was her name? Oh, geez. Oh, goodness. Big lips, full boobs. Oh, my goodness. I can't remember. She's a [sic] older lady. She stopped working because she got sick, bronchitis. Can't remember her name. But yeah, she was a bartender at King at [sic] Diamonds.” Id. This response does not reflect an awareness of the identity of Kimberly Jones.

         Defendants may not presume that plaintiffs know of defense witnesses, or how to contact them. It is clear that the fact witnesses were undisclosed during discovery.

         In Southern States, 318 F.3d at 597, the Fourth Circuit set out a five-factor test to determine if a failure to disclose was nonetheless justified or harmless, such that it could be considered. The factors are: “(1) the surprise to the party against whom the evidence would be offered; (2) the ability of that party to cure the surprise; (3) the extent to which allowing the evidence would disrupt the trial; (4) the importance of the evidence; and (5) the nondisclosing party's explanation for its failure to disclose the evidence.” Id. The burden of showing that nondisclosure was justified or harmless lies with the non-disclosing party. See Sprint Nextel Corp. v. Simple Cell Inc., 248 F.Supp.3d 663, 677 (D. Md. 2017) (citing Southern States, 318 F.3d at 596).

         Without prolonging the discussion, it is clear that plaintiffs suffered surprise from defendants' nondisclosure of the two witnesses, which they could not cure after the completion of discovery, at the summary judgment stage. Although this case is not yet at the trial stage, plaintiffs have not had an opportunity to depose the witnesses for purposes of summary judgment. Moreover, the statements in the affidavits-especially the statements as to the dancers' work schedules (ECF 100-40 at 1) and the lack of fines (ECF 100-41 at 1)-are pertinent to plaintiffs' claims. And, as discussed, defendants' explanation for their failure to disclose is sorely lacking.

         Judge Blake of this Court considered a similar issue in Sprint Nextel, 248 F.Supp.3d at 678, and decided to exclude the evidence from consideration in summary judgment proceedings, but to allow it at trial. I opt to do the same. Therefore, the Motion to Strike Affidavits of Stuckey and Jones shall be granted. However, defendants shall not be prevented from using those witnesses at trial, conditioned on defendants making the witnesses available for deposition within 30 days following the docketing of this Memorandum Opinion.

         I. Motion for Surreply and Motion to Strike Surreply

         The Corporate Defendants filed a Motion for Surreply (ECF 117), along with the proposed Surreply. ECF 126. Plaintiffs oppose the Motion for Surreply (ECF 122) and have moved to strike the Surreply. ECF 127. The Corporate Defendants oppose the Motion to Strike Surreply. ECF 130.

         Local Rule 105.2(a) provides that a party is not permitted to file a surreply without permission of the court. The filing of a surreply “is within the Court's discretion, see Local Rule 105.2(a), but they are generally disfavored.” EEOC v. Freeman, 961 F.Supp.2d 783, 801 (D. Md. 2013), aff'd in part, 778 F.3d 463 (4th Cir. 2015); see also, e.g., Chubb & Son v. C & C Complete Servs., LLC, 919 F.Supp.2d 666, 679 (D. Md. 2013). A surreply may be permitted when the party seeking to file the surreply “would be unable to contest matters presented to the court for the first time” in the opposing party's reply. Clear Channel Outdoor, Inc. v. Mayor & City Council of Baltimore, 22 F.Supp.3d 519, 529 (D. Md. 2014) (quotations and citations omitted). However, a surreply is not permitted where the reply is merely responsive to an issue raised in the opposition. See Khoury v. Meserve, 268 F.Supp.2d 600, 605-06 (D. Md. 2003). In that posture, there was a full opportunity to present the movant's arguments, and a surreply is unnecessary. Id. at 606.

         In their Motion for Surreply, the Corporate Defendants state no legal basis for why a surreply is appropriate. Instead, they assert: “Plaintiff(s) have intentionally misstated and mischaracterized the facts of the case and the arguments contained therein.” ECF 117 at 1. Moreover, they state that they “respectfully seek clarity and further support its [sic] previous arguments in aid of this Honorable Court's dispositive Ruling.” Id. The Corporate Defendants offer no specifics, nor do they cite any legal authority for their Motion for Surreply.

         Because I do not view the Surreply as a response to a matter raised for the first time in the Reply, I shall deny the Motion for Surreply. As a result, I shall deny, as moot, plaintiffs' Motion to Strike Surreply. ECF 127.

         II. Plaintiffs' Motion for Partial Summary Judgment

         Plaintiffs seek summary judgment as to four issues: (1) whether plaintiffs were employees of defendants for purposes of the FLSA, MWHL, and MWPCL; (2) whether defendants violated the FLSA, MWHL, and MWPCL by failing to pay plaintiffs a minimum wage; (3) whether plaintiffs are entitled to recover wage damages equal to the minimum wage for each week while employed by defendants; and (4) whether defendants' affirmative defenses may be applied to mitigate or negate the award of wages and damages.

         For the reasons that follow, I shall grant the Motion in part and deny it in part.

         A. Standard of Review

         Under Rule 56(a) of the Federal Rules of Civil Procedure, summary judgment is appropriate only “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” See Celotex Corp. v. Catrett, 477 U.S. 317, 322-24 (1986); see also Iraq Middle Mkt. Dev. Found. v. Harmoosh, 848 F.3d 235, 238 (4th Cir. 2017) (“A court can grant summary judgment only if, viewing the evidence in the light most favorable to the non-moving party, the case presents no genuine issues of material fact and the moving party demonstrates entitlement to judgment as a matter of law.”). The non-moving party must demonstrate that there are disputes of material fact so as to preclude the award of summary judgment as a matter of law. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 585-86 (1986).

         The Supreme Court has clarified that not every factual dispute will defeat the motion. “By its very terms, this standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986) (emphasis in original). A fact is “material” if it “might affect the outcome of the suit under the governing law.” Id. at 248. There is a genuine issue as to material fact “if the evidence is such that a reasonable jury ...


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