McFeeley v. Jackson St. Entm't, LLC

• Decision Date: 15 September 2014
• Docket Number: Civil Action No. DKC 12–1019.
• Citation: 47 F.Supp.3d 260
• Court: U.S. District Court — District of Maryland
• Parties: Laura McFEELEY, et al. v. JACKSON STREET ENTERTAINMENT, LLC, et al.

47 F.Supp.3d 260

Laura McFEELEY, et al.

v.JACKSON STREET ENTERTAINMENT, LLC, et al.

Civil Action No. DKC 12–1019.

United States District Court, D. Maryland.

Filed Sept. 15, 2014.

Gregg Cohen Greenberg, John McDonough, Michael Kingston Amster, Zipin Amster and Greenberg, LLC, Silver Spring, MD, for Laura McFeeley, et al.

Michael Lloyd Smith, Smith Graham and Crump LLC, Largo, MD, for Jackson Street Entertainment, LLC, et al.

MEMORANDUM OPINION

DEBORAH K. CHASANOW, District Judge.

Presently pending and ready for resolution in this Fair Labor Standards Act collective action are Plaintiffs' motion for partial summary judgment (ECF No. 45), and Defendants' cross motion for partial summary judgment (ECF No. 46). The issues have been briefed, and the court now rules, no hearing being deemed necessary. Local Rule 105.6. For the following reasons, Plaintiffs' motion for partial summary judgment will be granted in part and denied in part. Defendants' motion for partial summary judgment will be denied.

I. Background

Plaintiffs Laura McFeeley, Danielle Everett, Crystal Nelson, Dannielle Arlean McKay, Jenny Garcia, Patrice Howell, and Tarshea Jackson (collectively, “Plaintiffs”), on behalf of themselves and all others similarly situated, filed this collective action against the exotic dance clubs, Fuego's Exotic Dance Club (“Fuego”) and Extasy Exotic Dance Club (“Extasy”), and the individuals and entities that operate both of them: Defendants Jackson Street Entertainment, LLC; Risque, LLC; Quantum Entertainment Group, LLC; Nico Enterprises, Inc.; XTC Entertainment Group, LLC; and Uwa Offiah (collectively, “Defendants”) for violations of the minimum wage and overtime provisions of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201 et seq., the Maryland Wage and Hour Law (“MWHL”), Md.Code, Lab. & Empl. §§ 3–401 et seq., and the Maryland Wage Payment and Wage Collection Law (“MWPWC”), Md.Code Ann., Lab. & Empl. §§ 3–501 et seq. (ECF No. 31). Defendants filed counterclaims against Plaintiffs for breach of contract and unjust enrichment.¹ (ECF No. 32).

Defendants own and operate Fuego and Extasy exotic dance clubs, located in Prince George's County, Maryland. (ECF No. 45–1, at 3–4). Defendants have operated Fuego since 2008 and Extasy since mid to late 2010. (ECF No. 46–1, at 6). Defendant Uwa Offiah (“Mr. Offiah”) is the sole owner of both Fuego and Extasy and holds the only financial interest in the clubs. (ECF No. 45–10, at 6–7). Defendants have always classified the dancers at both Fuego and Extasy by contract as independent contractors. (ECF No. 45–10, at 8, 17). Plaintiffs are current or former exotic dancers who danced between April 2009 and the present at either one or both of Defendants' clubs. (ECF No. 45–1, at 3). There is no dispute that, during their time as exotic dancers at Fuego and Extasy, Plaintiffs did not receive compensation in the form of hourly wages. Plaintiffs signed “lease agreements”² wherein they were classified as independent contractors of Fuego and Extasy (“the clubs”). As a part of the compensation arrangement under these agreements, Plaintiffs received money from customers, including in the form of performance fees and customer tips. (ECF No. 45–10, at 8).

On April 3, 2012, Plaintiff Laura McFeeley filed an initial complaint. (ECF No. 1). On April 18, 2012, an amended complaint was filed adding Danielle Everett as plaintiff. (ECF No. 3). Defendants answered on May 21, 2013, and filed a counterclaim against Plaintiffs McFeeley and Everett. On August 24, 2012, Plaintiffs moved to facilitate identification of other similarly situated individuals. (ECF No. 8). On November 26, 2012, the undersigned granted in part and denied in part Plaintiffs' motion to dismiss Defendants' counterclaims. (ECF Nos. 13 and 14). The same day, the undersigned conditionally certified an FLSA collective class. (ECF No. 15, at 1). Subsequently, the remaining Plaintiffs—Crystal Nelson, Dannielle Arlean McKay, Jenny Garcia, Patrice Howell, and Tarshea Jackson—joined the action as “opt-in” plaintiffs. (ECF Nos. 18, 20, 26, 28, and 33).

On May 6, 2013, Plaintiffs filed a second amended complaint. (ECF No. 31). Defendants answered on May 9, 2013, and simultaneously filed counterclaims against all Plaintiffs. (ECF No. 32). Plaintiffs answered on May 15, 2013.³ (ECF No. 34). On January 3, 2014, Plaintiffs moved for partial summary judgment. (ECF No. 45). Plaintiffs ask the court to find in their favor on several issues:

(1) That, at all times relevant, each Plaintiff was an employee of Defendants under the FLSA and MWHL and was never an independent contractor;

(2) That Defendants violated the FLSA and MWHL by compensating Plaintiffs at an hourly rate less than the FLSA and MWHL required minimum wage and overtime rate;

(3) That Plaintiffs are entitled to recover unpaid wage damages and that Plaintiffs' unpaid wage damages should be calculated at an hourly rate not less than the FLSA and MWHL minimum wage, free and clear of any kickbacks, fees, fines, or charges paid by Plaintiffs to Defendants;

(4) That Uwa Offiah was at all times Plaintiffs' employer under the FLSA and MWHL, and as such is jointly and severally liable to Plaintiffs along with the corporate Defendants;

(5) That Plaintiffs are entitled to recover liquidated damages in an equal amount to Plaintiffs' to-be-determined unpaid wages under the FLSA; and

(6) That Defendants' service fee “offset” or “set off” fails as a matter of law and may not be applied to mitigate or negate any to be-determined damages owed by Defendants to Plaintiffs.

(ECF No. 45–1, at 1–2).

Defendants filed their opposition to Plaintiffs' motion for partial summary judgment and cross moved for partial summary judgment on their counterclaims on January 21, 2014. (ECF No. 46). Plaintiffs opposed Defendants' cross motion on February 7, 2014.⁴ (ECF No. 48).

II. Standard of Review

Rule 56(a) of the Federal Rules of Civil Procedure, permits a party to move for summary judgment or partial summary judgment by identifying “each claim or defense—or the part of each claim or defense—on which summary judgment is sought.” (emphasis added). “[P]artial summary judgment is merely a pretrial adjudication that certain issues shall be deemed established for the trial of the case. This adjudication ... serves the purpose of speeding up litigation by” narrowing the issues for trial to those over which there is a genuine dispute of material fact. Rotorex Co. v. Kingsbury Corp., 42 F.Supp.2d 563, 570–71 (D.Md.1999) (internal quotation marks omitted) (noting that “numerous courts have entertained and decided motions for partial summary judgment addressing particular issues”).

A motion for summary judgment shall be granted only if there exists no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(a) ; Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The moving party bears the burden of showing that there is no genuine dispute as to any material fact. However, no genuine dispute of material fact exists if the nonmoving party fails to make a sufficient showing that a genuine dispute exists. Celotex, 477 U.S. at 322–23, 106 S.Ct. 2548. Therefore, on those issues on which the nonmoving party has the burden of proof, it is his or her responsibility to confront the summary judgment motion with an affidavit or other similar evidence showing that there is a genuine dispute for trial.

In Anderson v. Liberty Lobby, Inc., the Supreme Court of the United States explained that, in considering a motion for summary judgment, the “judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.”477 U.S. at 249, 106 S.Ct. 2505 (1986). A dispute about a material fact is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id. at 248, 106 S.Ct. 2505. Thus, “the judge must ask himself not whether he thinks the evidence unmistakably favors one side or the other but whether a fair-minded jury could return a verdict for the [nonmoving party] on the evidence presented.” Id. at 252, 106 S.Ct. 2505.

In undertaking this inquiry, a court must view the facts and the reasonable inferences drawn therefrom “in the light most favorable to the party opposing the motion.” Matsushita Elec. Indus. Co. Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (quoting United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962) ); see also E.E.O.C. v. Navy Fed. Credit Union, 424 F.3d 397, 405 (4th Cir.2005). The mere existence of a “scintilla” of evidence in support of the non-moving party's case is not sufficient to preclude an order granting summary judgment. See Anderson, 477 U.S. at 252, 106 S.Ct. 2505. A “party cannot create a genuine dispute of material fact through mere speculation or compilation of inferences.” Shin v. Shalala, 166 F.Supp.2d 373, 375 (D.Md.2001) (citation omitted). Indeed, this court has an affirmative obligation to prevent factually unsupported claims and defenses from going to trial. See Drewitt v. Pratt, 999 F.2d 774, 778–79 (4th Cir.1993) (quoting Felty v. Graves–Humphreys Co.,

818 F.2d 1126, 1128 (4th Cir.1987) ).

III. Analysis

A. Plaintiffs' Motion for Partial Summary Judgment

1. Employee Determination Under the FLSA and MWHL

The first issue in Plaintiffs' motion for partial summary judgment is whether the dancers at Fuego and Extasy were employees within the meaning of the FLSA and the MWHL.⁵ The FLSA defines “employee” as “any individual employed by an employer.” To “employ” includes “to suffer or permit to work.” 29 U.S.C. §§ 203(e)(1), 203(g). The definition of employee is to be liberally construed and applied in accordance with the remedial nature of the Act....