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Jones v. Crusin' Chubbys Gentlemen's Club

United States District Court, W.D. Wisconsin

March 6, 2018

TERIANA JONES and BETHANY MORRISEY, on behalf of themselves and a class of employees and/or former employees similarly situated, Plaintiffs,

          OPINION & ORDER


         Plaintiffs Teriana Jones and Bethany Morrisey were both exotic dancers at defendant Cruisin' Chubbys Gentlemen's Club. They contend that defendants were their joint employer under both state and federal labor laws, but that defendants classified them incorrectly as independent contractors, and, as a result, violated legal requirements to pay plaintiffs a minimum wage and the higher rate for working overtime. Plaintiffs also contend that defendants violated state and federal law by retaining a portion of the tips the dancers received.

         Plaintiffs seek to represent a collective action under the Fair Labor Standards Act and a class action under state law. The court previously approved the parties' stipulation for conditional certification of plaintiffs' FLSA claims. Dkt. 58.

         Two related motions are before the court: (1) plaintiffs' motion to certify a class under Rule 23 as to their state law claims, Dkt. 72; and (2) defendants' motion to decertify the collective action under 29 U.S.C. § 216(b) as to plaintiffs' FLSA claims, Dkt. 85. Plaintiffs also move to dismiss the claim of “Jane Roe #5, ” another dancer who earlier had filed a notice of consent to join the lawsuit. Dkt. 83. That motion is unopposed and will be granted.

         As for the parties' dueling certification motions, the court will grant plaintiffs' motion and deny defendants'. The case for certification of plaintiffs' claims is relatively straightforward, as shown by the myriad decisions around the country certifying classes of dancers challenging their classification as independent contractors rather than employees. Although defendants deny that they are classifying their dancers incorrectly, none of the evidence cited by either side suggests that defendants classify each dancer differently, only that there is a factual dispute about how all the dancers are classified. Because that dispute can be resolved as to the entire class, it makes sense to decide in one lawsuit the dancers' employment status. There will be individualized questions regarding damages, but that is not a ground for denying the motion for class certification in light of the evidence that liability can be decided jointly.


         A. Legal standard

         Plaintiffs seek to certify their state law claims under Federal Rule of Civil Procedure 23, which imposes various requirements that all class actions must satisfy: (1) the scope of the class as to both its members and the asserted claims must be “defined clearly” using “objective criteria, ” Mullins v. Direct Digital, LLC, 795 F.3d 654, 657 (7th Cir. 2015); (2) the class must be sufficiently numerous, include common questions of law or fact, and be adequately represented by plaintiffs (and counsel) who have claims typical of the class, Fed.R.Civ.P. 23(a); and (3) the class must meet the requirements of at least one of the types of class actions listed in Rule 23(b).

         In this case, plaintiffs focus on Rule 23(b)(3), which applies if “the questions of law or fact common to class members predominate over any questions affecting only individual members” and “a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.[2] The ultimate question in a Rule 23(b)(3) class is whether “judicial economy from consolidation of separate claims outweighs any concern with possible inaccuracies from their being lumped together in a single proceeding for decision by a single judge or jury.” Mejdrech v. Met-Coil Sys. Corp., 319 F.3d 910, 911 (7th Cir. 2003). See also Suchanek v. Sturm Foods, Inc., 764 F.3d 750, 761 (7th Cir. 2014) (“Ultimately, the court must decide whether classwide resolution would substantially advance the case.”).

         Plaintiffs' claims under the Fair Labor Standards Act are governed by their own provision. Under 29 U.S.C. § 216(b), plaintiffs may bring a collective action “for and [o]n behalf of . . . themselves and other employees similarly situated.” Although the language in Rule 23 and § 216(b) is not the same, the court of appeals has stated that “there isn't a good reason to have different standards for the certification of the two different types of action, ” so it has incorporated the requirements for Rule 23 into § 216(b). Espenscheid v. DirectSat USA, LLC, 705 F.3d 770, 772 (7th Cir. 2013).[3]

         The court will discuss the Rule 23 requirements in three groups. Because most of defendants' objections relate to commonality, typicality, and predominance, the court will discuss them first. Next, the court will consider the scope of the proposed class. Finally, the court will address the requirements of numerosity and adequacy.

         B. Commonality, typicality, and predominance

         There is significant overlap in the requirements for commonality and typicality under Rule 23(a), and the requirements in Rule 23(b)(3) to show that common questions predominate and that a class action is superior to individual lawsuits. Gen. Tel. Co. of the Sw. v. Falcon, 457 U.S. 147, 157 n.13 (1982) (“The commonality and typicality requirements of Rule 23(a) tend to merge.”); Messner v. Northshore Univ. HealthSystem, 669 F.3d 802, 814 (7th Cir. 2012) (Rule 23(b)(3) predominance requirement is “similar to Rule 23(a)'s requirements for typicality and commonality”). All of those requirements focus on the question whether the court or the factfinder can resolve issues across the class rather than through individualized determinations. Costello v. BeavEx, Inc., 810 F.3d 1045, 1059 (7th Cir. 2016) (“Predominance is satisfied when common questions represent a significant aspect of a case and can be resolved for all members of a class in a single adjudication.”) (internal quotations and alterations omitted); Chi. Teachers Union, Local No. 1 v. Bd. of Educ. of Chi., 797 F.3d 426, 434 (7th Cir. 2015) (to satisfy commonality requirement, “[t]he claims must depend upon a common contention that is capable of class wide resolution”); Spano, 633 F.3d at 586 (to satisfy typicality requirement, “there must be enough congruence between the named representative's claim and that of the unnamed members of the class to justify allowing the named party to litigate on behalf of the group”).

         In this case, plaintiffs say that the predominant common question is whether defendants are misclassifying all of their exotic dancers as independent contractors rather than employees and thus evading three requirements of state and federal law: (1) paying plaintiffs a minimum wage; (2) paying plaintiffs overtime; and (3) allowing plaintiffs to keep all of their tips. Under the FLSA, a worker's status is determined under the “economic realities” test, which focuses on the degree of control exercised by the employer, among other things. Williams v. Wisconsin Dep't of Workforce Dev., No. 13-cv-794, 2015 WL 1520772, at *1-2 (W.D. Wis. Apr. 3, 2015).[4] The parties do not discuss the standard under state law, but they also do not contend that it is different from the federal standard, so the court will assume that the standards are the same for the purpose of the pending motions.

         To support their allegation that defendants have a policy of misclassifying dancers as independent contractors rather than employees, plaintiffs cite declarations of eight women who worked at Cruisin' Chubbys after 2014. Dkts. 74-81. Each of the women avers that the defendants determined their schedule, including when to arrive at the club; instructed them how to dress, how to perform, and what to do in between performances; determined when they would perform and for how long; deducted their pay when they arrived late or failed to perform as instructed; defined the types of private dances they could perform; imposed a pricing structure for each type of private dance; imposed “tip out” fees; and determined when the dancers could leave the club.

         A classwide policy or practice related to a key issue of liability is one of the most common ways for plaintiffs to show that class certification is appropriate, even when there are some differences among the potential claims. Dorman v. DHL Exp. (USA), Inc., No. 09-cv-99, 2010 WL 446071, at *3 (W.D. Wis. Feb. 3, 2010) (“Typically, when an employee challenges its employer's policy, the validity of that policy predominates over individual issues and class certification is appropriate.”) (internal citations omitted).[5] Because the question whether defendants are misclassifying the dancers is central to determining liability, it makes sense to allow plaintiffs to proceed as a class. Bell v. PNC Bank, Nat. Ass'n, 800 F.3d 360, 374-75 (7th Cir. 2015) (“[C]ommonality is satisfied when determination of the truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke. . . .The complexity of proof is a problem plaintiffs will have to address in presenting their case on the merits but it does not negate predominance of the central, common issue.”) (internal quotations and alterations omitted).

         This conclusion is supported by the many decisions across the country in which courts have certified classes involving dancers contending that they were misclassified. E.g., DeGidio v. Crazy Horse Saloon & Rest., Inc., No. 13-cv-2136, 2017 WL 5624310, at *15 (D.S.C. Jan. 26, 2017) (collecting cases in which district courts certified classes of exotic dancers asserting wage-and-hour claims).[6] Defendants cite Pecor v. N. Point EDC Inc., No. 16-C-1263, 2017 WL 3723600 (E.D. Wis. June 9, 2017), as an exception to the rule, but Pecor is not instructive. The defendants in that case presented evidence that “each dancer has a ...

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