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Hogan v. Cleveland Ave Restaurant, Inc.

United States District Court, S.D. Ohio, Eastern Division

November 1, 2017

Cleveland Ave Restaurant, Inc., et al, Defendants.

          Algenon L. Marbley Judge



         This matter is before the Court on the Motion for Protective Order to Stay Discovery, (ECF No. 98), Plaintiffs Response in Opposition (ECF No. 107), and Defendants Buckeye Association of Club Executives and the Owners Coalition's Reply (ECF No. 111). For the reasons that follow, the Court DENIES Defendants' Motion.


         On October 6, 2015, Plaintiff initially brought this wage lawsuit under the Fair Labor Standards Act ("FLSA") against Defendant Cleveland Avenue Restaurant, Inc., d/b/a "Sirens, " as well as management and owners, related to work performed in various roles at a Columbus-area adult entertainment club known as "Sirens." (ECF No. 1.) On November 23, 2016, Plaintiff served a subpoena for deposition and documents upon then non-party Buckeye Association of Club Executives ("B ACE"), a statewide, non-profit trade association. (ECF No. 46-1.) The subpoena primarily sought testimony and documents related to the so-called "Entertainer Tenant" system allegedly used by BACE's member-businesses to structure compensation arrangements. (Id. at 3, 6-7.) On December 7, 2016, BACE filed a Motion to Quash the subpoena. (ECF No. 46.) On December 28, 2016, this Court granted BACE's Motion to Quash on the basis that "Plaintiff has failed to establish the relevance of the information sought to its underlying FLSA claims." (ECF No. 59 at 5.) Specifically, with respect to the relevance of BACE-member practices, the Court held as follows:

As BACE argues, the FLSA claims being prosecuted by Plaintiff are predicated upon the business model of the Defendants in this action. That is to say, the relationship between the Plaintiff and her employer, specifically, her compensation arrangement, and the manner in which Defendants applied it to her and other similarly situated individuals, is determinative of the outcome of the case. Compensation arrangements, or "lease agreements" at other similarly situated businesses do not bear on Plaintiffs actual compensation. Information regarding BACE, its members, shows, training and "lease agreements, " therefore, is not sufficiently relevant to this action."


         Five months later, on May 1, 2017, Plaintiff filed her Motion to Amend the Complaint in order to add BACE and the Owner's Coalition ("OC") as named defendants in this matter. (ECF No. 71.) In pertinent part, Plaintiffs Amended Complaint includes the following allegations:

36. BACE and OC were the two main Ohio entertainment club industry trade associations that, on information and belief, have been and are responsible for artifices known as the "Tenant System" (also known as "the lease system"), by which member clubs, including Sirens, for at least the past six years have purported to deny exotic dancers their rightful minimum wages and have required such dancers to pay various artificial and illegal fees to club owners to work at their clubs, including a fee called "rent." On information and belief, other unnamed co-conspirators participated in tis conspiracy.
37. By creating and promoting use of the "Tenant System, " BACE acted in the interest of the co-conspirators, including Sirens, with respect to the coconspirators' employees and employment practices. Accordingly, BACE was and is an "employer" within the meaning of the FLSA and Ohio Law.

(ECF No. 74 at 6.) Plaintiff added counts for civil conspiracy, unjust enrichment, and anti-trust violations against both BACE and OC. (Id. at 24-27.) On June 23, 2017, Defendants BACE and OC filed their Motion to Dismiss the Amended Complaint, arguing that neither group maintained an ownership interest, managerial authority, or ability to dictate business models or establish policies with respect to Defendant Sirens or any other member-business. (ECF No. 93 at 7, No. 93-1 at 3-4 & No. 93-4 at 3-4.) Defendants also argue in their Motion to Dismiss that they are not, as a matter of law, "employers" under the operative state and federal statutes and that Plaintiff has failed to allege sufficient facts to the contrary to state a valid claim. (ECF No. 93 at 12.)

         On June 27, 2017, Plaintiff served Notices of Deposition to Defendants BACE and OC, identifying the following subjects:

1. The organizations' management structure, including identities, positions, and duties of anyone within the ...

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