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Walsh v. Gilbert Enterprises, Inc.

United States District Court, D. Rhode Island

March 14, 2019

ARIELLE WALSH, on behalf of herself and all others similarly situated, Plaintiffs,
v.
GILBERT ENTERPRISES, INC., d/b/a CLUB FANTASIES, and FRANCIS DELUCA, Defendants.

          MEMORANDUM AND ORDER

          William E. Smith Chief Judge

         Before the Court is Plaintiff's Motion for Rule 23 Class Certification (ECF No. 52) and Plaintiff's Renewed Motion for Notice to be Issued to Similarly Situated Individuals Pursuant to 29 U.S.C. § 216(b) (ECF No. 53). Defendants have objected to both motions (ECF No. 56). For the reasons stated, Plaintiff's motions are granted.

         I. Background

         This is one of four cases brought on behalf of “exotic dancers” at various Rhode Island night clubs since 2015. See also Levi v. Gulliver's Tavern, Inc., C.A. No. 15-216 (“Levi”); Binienda v. Atwells Realty Corp., C.A. No. 15-253 (“Binienda”); Pizzarelli v. The Cadillac Lounge, L.L.C., C.A. No. 15-254 (“Pizzarelli”). The cases involve substantially similar allegations and identical causes of action, namely, the allegation that women who worked as dancers at these clubs were misclassified as independent contractors instead of employees. Compare Levi Am. Compl., ECF No. 13 in C.A. No. 15-216, and Binienda Am. Compl., ECF No. 10 in C.A. No. 15-253, and Pizzarelli Compl., ECF No. 1 in C.A. No. 15-254 with Walsh Compl., ECF No. 1 in C.A. No. 15-472. On April 13, 2018, the Court issued a lengthy memorandum explaining its reasoning for granting the plaintiff's motions for class certification and summary judgment in Pizzarelli v. Cadillac Lounge, L.L.C.. See Mem., ECF No. 47 in C.A. No. 15-254-WES (“Pizzarelli Memorandum”). Likewise, on April 23, 2018, the Court issued a similar memorandum addressing similar issues in Levi v. Gulliver's Tavern. See Mem., ECF no. 59 in C.A. No. 15-216-WES (“Levi Memorandum”). Because this case is similar to Pizzarelli and Levi in its facts, the parties' arguments, and the Court's findings, this Memorandum incorporates the reasoning set forth in the Levi and Pizzarelli Memoranda and highlights only slight differences to the extent they are relevant to the present motions.

         Arielle Walsh (“Walsh” or “Plaintiff”) is a former dancer at Club Fantasies (the “Club”) in Providence. See Pl.'s Mem. in Supp. of Mot. for Rule 23 Certification (“Pl.'s Mem.”) 1, 4, ECF No. 52-1. As a dancer, Plaintiff provided “erotic entertainment” to customers. Id. at 4. According to Plaintiff, she was a part of the Defendant's usual business operations and subject to significant control from the Club. Id. at 7. For example, Plaintiff alleges that the Club controls the dancers' schedules by requiring them to work three shifts per week and to report their availability to management at least a week in advance for scheduling purposes. Id. If a dancer failed to follow her reported schedule, Defendant could fine, suspend, or terminate the dancer. Id. at 6-7. Plaintiff also alleges that the Club controlled how dancers worked during their shifts by requiring them to wear certain attire or makeup and posting various rules-of-conduct in the dressing rooms. Id. at 8. And Plaintiff alleges that the Club supervised her and other dancers by, among other things, employing “house moms” to manage the dancers and tell them when to perform. Id. at 6.

         As compensation, Plaintiff alleges that dancers made money exclusively based on tips from customers; the Club paid no wages of any kind. Id. at 9. From those earned tips, dancers were required to pay a “shift fee” to the house, to “tip out” other staff members, to pay the DJ, and to pay fines for violating Club rules. Id.

         The Club requires all dancers to audition and, if they are hired, to sign agreements classifying them as independent contractors. Id. at 5-6. Walsh signed her agreement in 2012 (“the 2012 Agreement”); however, starting in 2016, the dancers were required to sign a new agreement that included a mandatory arbitration provision (“the 2016 Agreement”). Id. at 5, 13-14. Plaintiff stopped working at the Club before the 2016 Agreement was introduced. As such, some putative class members (but not Plaintiff) may be subject to arbitration agreements. Id. at 13. II. Motion for Rule 23 Class Certification Plaintiff moves for class certification pursuant to Rule 23 of the Federal Rules of Civil Procedure on her state law claims only. She defines the class as: “[A]ll individuals who have worked as exotic dancers at Club Fantasies at any time since November 6, 2012.” Id. at 2. She argues that she meets the numerosity, commonality, typicality, adequacy, predominance, and superiority requirements of Rule 23 as follows.

         a. Legal Standard

         A class may be certified if the Plaintiff shows that the class meets the Rule 23(a) and (b)(3) requirements:

(1) numerosity: “the class is so numerous that joinder of all members is impracticable”;
(2) commonality: “there are questions of law or fact common to the class”;
(3) typicality: “the claims or defenses of the representative parties are typical of the claims or defenses of the class”;
(4) adequacy: “the representative parties will fairly and adequately protect the interests of the class”;
(5) predominance: “questions of law or fact common to class members predominate over any questions affecting only individual members”; and
(6) superiority: “a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.”

Fed. R. Civ. P. 23(a), (b)(3).

         “Rule 23 does not set forth a mere pleading standard.” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011). A plaintiff wishing to certify a class under Rule 23 must produce evidence sufficient to show her compliance with the rule. See Id. at 350-51. The Court must undertake a “rigorous analysis” of the Rule 23 requirements, which often involves “some overlap with the merits of the plaintiff's underlying claim.” Id. (citations omitted).

         b. Parties' Arguments

         First, Walsh argues that more than fifty individuals work as dancers at the Club each month, suggesting to the Court that there could be hundreds of potential plaintiffs in the community. Pl.'s Mem. at 11. Second, Walsh contends that the question of whether dancers were misclassified as independent contractors is common to all class members. Id. at 15. She claims that the issue of the arbitration provision is not germane to the dancers' underlying claims and therefore should not be considered at the class certification stage. Id. at 13-14. Third, Walsh argues that she adequately represents the interests of the class because she worked at the same club, was subject to the same policies and contractual terms as the proposed class and is seeking the same recovery for herself as she is for the proposed class. Id. at 15-16. Fourth, Walsh contends that the defining question in this case (of employment status) will turn on common evidence concerning the Club's practices, policies, and rights with respect to the dancers and, therefore, common issues predominate over individual issues. Id. at 17. Fifth and finally, Walsh argues that a class action is the superior means of litigating these claims because the class members' damages may be relatively small such that their ability and incentive to individually litigate their claims may not exist. Id. at 20.

         Defendants argue that Plaintiff has not met the requirements of Rule 23 for the following reasons. First, they contend that Walsh has identified only five opt-in plaintiffs who have chosen to join the lawsuit and that this minimal engagement suggests that there is no interest from putative class members in participating in the case. See Def.'s Resp. to Pl.'s Mot. for Rule 23 Class Certification and Pl.'s Renewed Mot. for Notice to be Issued (“Def.'s Resp.”) 17, ECF No. 56-1. As such, Defendants ask the Court to find an absence of numerosity. Second, Defendant claims that the differences between the 2012 Agreement and the 2016 Agreement prevent Walsh from proving that her claims are typical of the class because, according to Defendants, class members who worked at the club after 2016 are contractually barred from participating in the action. Id. at 36. Third, Defendants contend that Walsh is an inadequate representative for the class because her claims are directly antagonistic to the claims of currently-employed dancers who benefit from being classified as independent contractors. Id. at 23-24. Fourth, Defendants claim that the “basic liability question - whether entertainers are employees or independent contractors - is not susceptible to common or representative proof” and, therefore, common questions do not predominate over individual questions. Id. at 28. For the same reason, Defendants argue that the class action mechanism is not the superior method of litigating these claims. Id. at 28, 30.

         c. Discussion

         i. Numerosity

         Class size, while important, is not determinative of the numerosity requirement. See Andrews v. Bechtel Power Corp., 780 F.2d 124, 131 (1st Cir. 1985). Furthermore, numerosity is “‘not a difficult burden to satisfy'” and courts routinely find that classes with more than forty members meet the requirement. McAdams v. Mass. Mut. Life Ins. Co., No.Civ.A. 99-30284-FHF, 2002 WL 1067449 at *3 (D. Mass. 2002) (quoting In re Cardizem CD Antitrust Litig., 200 F.R.D. 297, 303 (E.D. Mich. 2001)) (granting class certification for a class of 117 members dispersed across thirty- three states); see also In re Modafinil Antitrust Litig., 837 F.3d 238, 250 (3d Cir.2016) (“Leading treatises have collected cases and recognized the general rule that [a] class of 20 or fewer is usually insufficiently numerous [and a] class of 41 or more is usually sufficiently numerous. . .”)(quotations omitted).

         Here, Defendants have not contested that more than fifty entertainers work at the Club each month, raising the inference that there could be several hundred potential plaintiffs in the community. See Dep. of Frank DeLuca 39-40, ECF No. 52-3. Accordingly, the Court is satisfied that Plaintiff has met Rule 23's numerosity requirement. ii. Commonality To satisfy the commonality requirement, Plaintiffs must show that the claims “depend upon a common contention . . . capable of classwide resolution, ” and that “class members have suffered the same injury.” Dukes, 564 U.S. at 350, 352 (holding that 1.5 million employees did not meet the commonality requirement because their underlying “pattern or practice of discrimination” claim involved “literally millions of employment decisions.”)(citations omitted).

         Nothing in the record indicates that Defendants' right to control Plaintiff was any different from the Club's right to control other proposed class members, including those who are subject to mandatory arbitration provisions. Indeed, Defendants admit that they classified all entertainers as independent contractors. See Def.'s Resp. 5. Because the state law claims are based on Defendants' classification of potential class members as independent contractors, the claims surely satisfy the commonality requirement. See DeGidio v. Crazy Horse Saloon & Rest., Inc., No. 4:13-CV-02136-BHH, 2017 WL 5624310, at *11 (D.S.C. Jan. 26, 2017), aff'd and remanded, 880 F.3d 135 (4th Cir. 2018), (“Various courts have found commonality where the record evidence established that entertainers were subject to a uniform set of pay policies and practices.”). There are questions of law and fact common to the class sufficient to satisfy Rule 23(a)(2).

         iii. Typicality

         The Supreme Court has stated that:

[T]he commonality and typicality requirements of Rule 23(a) tend to merge. Both serve as guideposts for determining whether under the particular circumstances maintenance of a class action is economical and whether the named plaintiff's claim and the class claims are so interrelated that the interests of ...

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