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Murray v. Silver Dollar Cabaret, Inc.

United States District Court, W.D. Arkansas, Fayetteville Division

February 8, 2017

MARIAH MURRAY and AMBER EVANS, each individually and on behalf of all others similarly situated PLAINTIFFS
v.
SILVER DOLLAR CABARET, INC.; PLATINUM CABARET, LLC; ANTHONY F. CATROPPA; and ANTHONY K. CATROPPA, each individually and as officers and/or directors of Silver Dollar Cabaret, Inc. and/or Platinum Cabaret, LLC DEFENDANTS

          OPINION AND ORDER

          P.K. HOLMES, III CHIEF U.S. DISTRICT JUDGE.

         Before the Court is Plaintiffs Mariah Murray and Amber Evans's second motion for conditional certification of a collective action, disclosure of contact information for potential opt-in plaintiffs, and to send court-approved notice (Doc. 40); Defendants' response (Doc. 44); Plaintiffs' reply (Doc. 46-1); and the parties' supporting documents. Plaintiffs have also filed a second motion for Rule 23 class certification (Doc. 47), to which Defendants responded (Doc. 52), and Plaintiffs replied (Doc. 53-1). The Court will address each motion in turn.

         I. Background

         Plaintiffs are former exotic dancers at Silver Dollar Cabaret, Inc. and Platinum Cabaret, LLC, both located in Fayetteville, Arkansas. They claim while they were dancers at the two adult entertainment clubs, Defendants violated the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq. (the “FLSA”) and the Arkansas Minimum Wage Act, A.C.A. §§ 11-4-201 et seq. (the “AMWA”). Specifically, Plaintiffs allege that they and others performed on Defendants' premises during a period which extends three years prior to the filing of the complaint, and that they were not paid a minimum wage or overtime compensation for hours worked in excess of 40 in a given week. They claim that at all relevant times, Defendants knew or should have known that the FLSA and AMWA applied to the dancers.

         Plaintiffs seek conditional certification of their FLSA claims as a collective action pursuant to 29 U.S.C. § 216(b), along with an authorization to issue notice to putative class members, and approval of the proposed notice (Doc. 40-3), proposed consent to join form (Doc. 40-4), and proposed follow-up postcard (Doc. 40-5). In addition, Plaintiffs seek Rule 23 class certification for their AMWA claims, which involve practically identical allegations. Defendants oppose the motions and raise a number of objections to each of Plaintiffs' requests and proposals.

         II. Discussion

         A. Motion for Conditional Certification of a Collective Action

         1.Conditional Certification

         “The FLSA allows named plaintiffs to sue [their employer] ‘for and in behalf of… themselves and other employees similarly situated.'” Bouaphakeo v. Tyson Foods, Inc., 765 F.3d 791, 796 (8th Cir. 2014) (quoting 29 U.S.C. § 216(b)). This type of suit-a collective action-is distinguishable from a class action pursuant to Federal Rule of Civil Procedure 23, as it requires that plaintiffs use the opt-in mechanism under 29 U.S.C. § 216(b) for joining a putative class of plaintiffs rather than the opt-out procedures in Rule 23. Schmidt v. Fuller Brush Co., 527 F.2d 532, 536 (8th Cir. 1975). The FLSA gives the Court “the requisite procedural authority to manage the process of joining multiple parties in a manner that is orderly, sensible, and not otherwise contrary to statutory commands or the provisions of the Federal Rules of Civil Procedure.” Hoffman-La Roche Inc. v. Sperling, 493 U.S. 165, 170 (1989). “The court has a responsibility to avoid the stirring up of litigation through unwarranted solicitation of potential opt-in plaintiffs, but the district court should, in appropriate cases, exercise its discretion to facilitate notice to potential plaintiffs.” Bouaphakeo v. Tyson Foods, Inc., 564 F.Supp.2d 870, 890 (N.D. Iowa 2008) (citing Severtson v. Phillips Beverage Co., 137 F.R.D. 264, 267 (D. Minn. 1991); Hoffman-La Roche, 493 U.S. at 169) (internal quotations omitted).

         Ultimately, certification of a collective action will depend on whether the named plaintiffs are similarly situated to the putative class. Neither § 216(b) nor the Eighth Circuit Court of Appeals has defined when “other employees [are] similarly situated” so that collective action certification and authorization of notice is appropriate. Davenport v. Charter Comms., LLC, 2015 WL 164001, at *4 (E.D. Mo. Jan. 13, 2015). However, most district courts within the Eighth Circuit have utilized a two-stage approach for collective action certification under § 216(b). See e.g., Resendiz-Ramirez v. P & H Forestry, L.L.C., 515 F.Supp.2d 937, 940 (W.D. Ark. 2007) (“The Court is convinced that the more prudent approach is to use the two-stage certification analysis that is used by a majority of courts, including a majority of district courts in the Eighth Circuit.”). Nonetheless, the Court finds it appropriate to emphasize that nothing in Eighth Circuit or United States Supreme Court precedent requires district courts to utilize this approach; rather, “[t]he decision to create an opt-in class under § 216(b), like the decision on class certification under Rule 23, remains soundly within the discretion of the district court.” Bouaphakeo, 564 F.Supp.2d at 891 (citing Hipp v. Liberty Nat. Life Ins. Co., 252 F.3d 1208, 1219 (11th Cir. 2001)).

         The two-stage approach to certifying a collective action is divided into (1) the notice stage and (2) the opt-in or merits stage. Resendiz-Ramirez, 515 F.Supp.2d at 941. First, when named plaintiffs move for certification of a collective action-typically early in the discovery process- a court considers whether the putative class should be given court-authorized notice of the opportunity to opt in to the action. Id. This requires an initial determination of whether Plaintiffs and putative class members are similarly situated, but because this inquiry is made at such an early stage of the litigation, the Court applies a fairly lenient standard. Kautsch v. Premier Commc'ns, 504 F.Supp.2d 685, 688 (W.D. Mo. 2007). Specifically, Plaintiffs bear the burden to make a modest factual showing that they and the putative class members were victims of a common decision, policy, or plan of the employer that affected all class members in a similar manner. Resendiz-Ramirez v. P & H Forestry, LLC, 515 F.Supp.2d 937, 940-41 (W.D. Ark. 2007). While the burden of proof is relatively low, “some identifiable facts or legal nexus must bind the claims so that hearing the cases together promotes judicial efficiency.” Jost v. Commonwealth Land Title Ins. Co., 2009 WL 211943, at *2 (E.D. Mo. Jan. 27, 2009) (quotations omitted). Some factors that may be considered by district courts making this determination include: (1) whether everyone worked in the same location; (2) whether they held the same job title; (3) whether the alleged violations occurred during the same time period; (4) whether all workers were subjected to the same policies and practices, and whether those policies and practices were established in the same manner by the same decision maker; and (5) the extent to which the acts constituting the alleged violations are similar. See Watson v. Surf-Frac Wellhead Equip. Co., 2012 WL 5185869, at *1 (E.D. Ark. Oct. 18, 2012). If notification is deemed appropriate, the class is conditionally certified for notice purposes and the action proceeds as a representative action throughout discovery. Croft v. Protomotive, Inc., 2013 WL 1976115, at *1 (W.D. Ark. May 13, 2013) (citing Resendiz-Ramirez, 515 F.Supp.2d at 940). “Second, when discovery is largely complete, the defendant may move for decertification, and the court will consider other factors to determine whether the conditionally certified class should be permitted to proceed as a collective action.”

Id.

         Plaintiffs request that the Court conditionally certify and approve notice for all potential class members for a class defined as all exotic dancers who worked for Defendants at the two clubs in question within a three year period.[1] Considering the relevant standards and applicable factors listed above, the Court finds under the fairly lenient standard applicable to this notice stage of certification that Plaintiffs have met their burden to demonstrate that that they are similarly situated with putative members to the extent necessary to justify court-authorized notice to the proposed class. Throughout the pleadings and sworn affidavits, Plaintiffs have established that they and all other potential plaintiffs were exotic dancers at the two adult entertainment clubs in question at all relevant times, and they were all subject to the same alleged FLSA violation by not being paid a minimum wage or compensated for overtime. Plaintiffs set forth substantial allegations that management exerted a significant amount of control over the dancers via the same policies and procedures, and that this led to the alleged FLSA violations.

         The defense raises minimal arguments against certification at this stage, simply arguing that two out of the 16 individuals who have consented to being potential opt-in plaintiffs were hourly employees of Defendants. Class members need not be identically situated to be considered similarly situated. Kautsch, 504 F.Supp.2d at 690. Moreover, the “disparate factual and employment settings of the individual plaintiffs” is a consideration usually reserved for second stage analysis. Smith v. Heartland Auto. Servs., Inc., 494 F.Supp.2d 1144, 1150 (D. Minn. 2005); Kautsch v. Premier Comms., 2008 WL 294271, at *2 (W.D. Mo. Jan. 31, 2008); Bouaphakeo, 564 F.Supp.2d at 892. The Court does not make findings of fact or credibility determinations with respect to contradictory evidence submitted by the parties at this stage. Loomis v. CUSA, LLC, 257 F.R.D. 674, 676 (D. Minn. 2009). At this stage of the litigation, the Court determines that Plaintiffs have met their burden of establishing that they are similarly situated to other dancers at the two adult entertainment clubs during all relevant times, and that they have made substantial factual allegations to support their claim of FLSA violations for minimum wage and overtime compensation. Accordingly, the Court will conditionally certify this action for the purpose of giving notice to putative plaintiffs, subject to a refining of the class definition.

         2.Temporal Scope of the Class Definition and Equitable Tolling

         Plaintiffs request that the Court conditionally certify and approve notice to all potential class members for a class defined as:

All Exotic Dancers who worked for Defendants Silver Dollar Cabaret, Inc., Platinum Cabaret, LLC, Anthony F. Catroppa, and Anthony K. Catroppa (collectively “Defendants”) in the State of Arkansas at any time after July 30, 2012.

         (Doc. 40). Defendants raise two specific objections to this class definition. Defendants first oppose the class definition including the names of individual defendants Anthony F. Catroppa and Anthony K. Catroppa. However, because both individuals are named as defendants in the lawsuit, the Court finds that their inclusion in the class definition along with the other named defendants is appropriate.

         More appropriately, Defendants object to the temporal scope of the class definition. As it stands, the class period extends three years prior to the filing of the complaint in this action on July 30, 2015, but Defendants argue that the correct class period is three years prior to the Court's entering of an order conditionally certifying the collective action up through the close of the opt-in period. This objection invariably invokes whether the Court should equitably toll the limitations period.

         A cause of action under the FLSA “may be commenced within two years after the cause of action accrued, and every such action shall be forever barred unless commenced within two years after the cause of action accrued, except that a cause of action arising out of a willful violation may be commenced within three years after the cause of action accrued.” 29 U.S.C. § 255(a). Because Plaintiffs allege willful violations of the FLSA, a three-year limitations period applies. Typically, the statute of limitations for each plaintiff in an FLSA collective action runs when he or she files written consent with the court effectively joining the lawsuit rather than when the named plaintiff files the complaint. 29 U.S.C. § 256(b). However, “[e]quitable tolling generally may be applied to ‘avoid inequitable circumstances' and may be applied “as a matter of fairness where a party has been prevented in some extraordinary way from exercising his rights.” Lee v. ABC Carpet & Home, 236 F.R.D. 193, 200 (S.D. N.Y. 2006).

         Even though their class definition imposes a class period of three years from the filing of the complaint and Defendants have objected to this, Plaintiffs contend that the Court should “leave the issue of equitable tolling to be decided at a future date.” (Doc. 40, ¶ 7). Plaintiffs further argue that “[i]t would be wrong of the Court to foreclose the possibility of granting the tolling request at this time, since the issues have not been briefed.” (Doc. 46-1, p. 3). The Court disagrees. When Defendants objected to the temporal scope of the class period and contended that equitable tolling should not apply, that was the proper occasion for Plaintiffs to brief the Court with their arguments as to why the Court should toll the limitations period. Moreover, Plaintiffs have had almost a year to supplement their motion, yet they have not done so.

         “Plaintiffs bear the burden of demonstrating why they are entitled to equitable tolling, and the resolution of the issue is fact-specific.” Cruthis v. Vision's, 2013 WL 4028523, at *5 (E.D. Ark. Aug. 7, 2013). Because Plaintiffs have not met their burden, the Court will not equitably toll the limitations period to three years prior to the filing of the complaint.[2] However, the Court notes that “[t]he delay caused by the time required for a court to rule on a motion, such as one for certification of a collective action in an FLSA case, may be deemed an extraordinary circumstance justifying application of ...


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