United States District Court, S.D. New York
SABRINA HART and REKA FUREDI, on behalf of themselves and all others similarly situated, and the New York Rule 23 Class, Plaintiffs,
RCI HOSPITALITY HOLDINGS, INC., f/k/a Rick's Cabaret International Inc., RCI ENTERTAINMENT (NEW YORK), INC., and PEREGRINE ENTERPRISES, INC., Defendants.
OPINION & ORDER
PAUL A. ENGELMAYER, District Judge.
Trial in this case is scheduled to begin on April 27, 2015. The parties have recently filed numerous motions in limine. See generally Dkt. 643-99. This Opinion and Order resolves plaintiffs' motion in limine Number 10. Dkt. 662-63. Plaintiffs there move to preclude defendants from arguing or introducing evidence at trial that the official business hours of Rick's NY ("the Club") were other than 11 a.m. to 4 a.m. The Court grants plaintiffs' motion.
By way of relevant background, the Court has entered summary judgment for plaintiffs, who work as dancers at the Club, on their minimum-wage claims brought under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201 et seq., and the New York Labor Law ("NYLL"), §§ 190 et seq. & §§ 650 et seq. The Court has also entered partial summary judgment as to plaintiffs' damages on these claims. Specifically, the Court has granted summary judgment with respect to 57, 823 dancer work-days. As to these dancer work-days, the Court held, the Club's records of the hours of the dancer in question are complete and conclusive, such that there is no disputed issue of fact as to the hours the dancer worked, and the calculation of minimum-wage damages is therefore purely an exercise in multiplication. See Dkt. 600 ("November 2014 Decision"), reported at Hart v. Rick's Cabaret Int'l, Inc., No. 09 Civ. 3043 (PAE), 2014 WL 6238175 (S.D.N.Y. Nov. 14, 2014).
Among the discrete issues left open for trial will be plaintiffs' damages as to the other 80, 057 dancer work-days at issue. As to those work-days, the Club's records of dancer-hours are not complete. The Club's "Clubtrax" system generally contains a log-in time for the dancer. But these records often lack a conclusive log-out time.
As to work-days for which there is not a reliable log-out time for the dancer, the parties dispute the appropriate basis to reasonably determine the time at which the dancer's work-day ended, so as to permit a finding of the hours the dancer worked and therefore the minimum wages to which she was entitled. The parties debate the persuasiveness of potential proxies that might be used to arrive at, or reasonably estimate, the time at which the dancer ceased work. For example, where the Club's records reflect that a dancer redeemed a "Dance Dollar" at a particular time, under what circumstances may that be taken to reflect that the dancer was still working at the Club at that time? Relatedly, the parties debate whether certain log-in or log-out times recorded in the Clubtrax system for various dancer work-days ought to be discounted as "default" times inputted by Clubtrax to fill a void, as opposed to reflecting actual acts of logging in or logging out by a dancer. These disputes over methodology for inferring hours, and therefore minimum-wage damages, as to dancer work-days for which the Club's records are imperfect are a significant focus of the competing submissions by the parties' experts: for plaintiffs, Dr. David Crawford, and for defendants, Dr. Paul F. White.
Relevant here, the Club's hours of operation are a background fact that has informed the experts' conclusions as to these points. The Club's hours inform, for example, the experts' assessments as to which log-in and log-out times should be treated as having been inputted by the dancer as opposed to being a Clubtrax-generated "default" time. Notably, both experts used the same assumption as to the Club's hours of operation. As detailed below, Dr. Crawford explicitly assumed and repeatedly stated in his expert analysis that the Club's hours every day were 11 a.m. to 4 a.m. See, e.g., Dkt. 513 Ex. 2 ("Dr. Crawford Report"), ¶ 21; id. ¶ 23; id. at n.7; id. Ex. 4 ("Dr. Crawford Rebuttal"), ¶ 15; id. Ex. 3 ("Crawford Dep."). 44. And Dr. White utilizes the same assumption. See, e.g., Dkt. 516 Ex. Q ("Dr. White Report"), 5; Dkt. 513 Ex. 1 ("Dr. White Rebuttal"), 2. Neither expert anywhere states or implies that the Club's official hours of operation were ever anything other than 11 a.m. to 4 a.m.
In preparation for trial, and in order to streamline trial, plaintiffs sought a stipulation from the defense that the Club's official hours of operation were 11 a.m. to 4 a.m. each day. See Dkt. 663 ("Pl. Br."), 2. The defendants declined to so stipulate. In their brief, defendants concede the Club's hours on Monday through Friday were 11 a.m. to 4 a.m. throughout the class period. See Dkt. 699 ("Def. Br."), 2. Defendants also concede that the Club's closing time on weekends was consistently 4 a.m. Id.  However, defendants now claim, the Club's opening time on Saturdays and Sundays in fact was later than 11 a.m., and varied over time. Id. Defendants claim that (1) before March 2007, the Club opened at 6 p.m. on weekends; (2) between March 2007 and June 1, 2012, the Club opened at 4 p.m. on weekends; and (3) between June 2, 2012 and the end of the class period (October 31, 2012), the Club opened at 12 p.m. ( i.e., noon) on weekends. Id. Defendants indicated that they might use these assumptions as a basis for challenging Dr. Crawford's methodology for calculating damages. Id.
Plaintiffs now move in limine to preclude defendants from introducing evidence that the Club's hours were other than 11 a.m. to 4 a.m., or making arguments to this effect. Plaintiffs claim that defendants have repeatedly represented during this litigation that the Club's business hours were 11 a.m. to 4 a.m., that defendants never stated otherwise, that both plaintiffs and Dr. Crawford had relied on this factual premise in formulating their damages analyses, and that it would be unfairly prejudicial to permit defendants to abandon this position on the eve of trial. See generally Pl. Br. Defendants, for their part, deny ever having made an "actual statement... or agreement... that the Club opened at 11 a.m. Monday through Sunday." Def. Br. 2. Defendants argue that plaintiffs, in imputing such a representation to defendants, have distorted the factual record. Id.
The Court rules - emphatically - for plaintiffs on this point. The record reflects a series of consistent and explicit affirmative representations by defendants that the Club's business hours were 11 a.m. to 4 a.m., with no exception for weekends. It also reveals a complete failure by defendants - despite criticizing Dr. Crawford's methodology on other grounds and even moving to strike it as unreliable - ever to contest this foundational premise of his and of plaintiffs. Indeed, the record reflects, at no point before the recent dispute over plaintiffs' motion in limine did defendants ever claim that the Club's opening time on weekends was other than 11 a.m.
The following representations are indicative:
In his October 2009 deposition, Ken Sistrunk, the Club's general manager, stated that the Club's morning shift ran from 11 a.m. until 7 p.m. and that the Club's night shift ended at 4 a.m. Dkt. 668, Ex. 44. He did not state that the Club ever opened at an hour other than 11 a.m.
In his January 24, 2014 report, defendants' expert, Dr. White, introduced his analysis by stating: "Given that the club closes at 4:00am and opens again at 11:00am...." Dr. White Report, at 5. He did not qualify this statement by limiting it to weekdays. In his February 21, 2014 report rebutting Dr. Crawford's report, Dr. White states, "In Paragraph 22, the plaintiffs' expert discusses how he treats logout times that occur between 4:00AM and 11:00AM, the club closing and opening times, respectively." Dr. White Rebuttal, 2. Although criticizing Dr. Crawford's report on several other grounds, Dr. White did not challenge Dr. Crawford's premise, which Dr. White repeated, as to the Club's hours.
In his January 27, 2014 report, plaintiffs' expert, Dr. Crawford, repeatedly referred to the period between 4 a.m. and 11 a.m. as the hours when the Club was closed and to the remaining 17 hours in each 24-hour period as the hours when the Club was open. See, e.g., Dr. Crawford Report, ¶¶ 21-23 & n.7. Dr. Crawford made the same statement in his February 21, 2014, rebuttal report: "As I noted in my [January] Report, there are log-in times during the hours when the club is closed (4:00AM to 11:00AM)." Dr. Crawford Rebuttal, ¶ 15. Although attacking Dr. Crawford's logic and methodology in a detailed motion to exclude his testimony pursuant to Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579 (1993), defendants at no point disputed his premise as to the Club's hours.
In their March 17, 2014, memorandum in support of their Daubert challenge to Dr. Crawford's testimony, defendants repeatedly treated the Club's hours as 11 a.m. to 4 a.m., see, e.g., Dkt. 514, at 16, and described the remaining seven hours as the hours "when the Club is closed, " id. at 17. Although attacking other assumptions of Dr. Crawford's as "arbitrary" or as "voodoo logic, " see, e.g., id. ...