OPINION & ORDER
Trial in this case is scheduled to start on April 27, 2015. Dkt. 621. This decision resolves a series of motions in limine filed by the parties.
These motions largely, although not exclusively, call upon the Court to apply Rules 401, 402, and 403 of the Federal Rules of Evidence. In resolving motions implicating these rules, the Court has therefore been guided by the following familiar principles, which this decision applies and elaborates upon in the course of resolving particular motions.
The “standard of relevance established by the Federal Rules of Evidence is • not high.” United States v. Southland Corp.,
Under Rule 403, the Court may exclude relevant evidence where its probative value is substantially outweighed by the risk of “unfair prejudice, confusing the issues, misleading the jury, undue delay, wasting time, or needlessly presenting cumulative evidence.” See generally United States v. Gupta,
Furthermore, “[district courts analyzing evidence under Rule 403 should consider whether a limiting instruction will reduce the unduly prejudicial effect of the evidence so that it may be admitted.” United States v. Ferguson,
“The purpose of an in limine motion is to aid the trial process by enabling the Court to rule in advance of trial on the relevance of certain forecasted evidence, as to issues that are definitely set for trial, without lengthy argument at, or interruption of, the trial.” Schneider,
I. Plaintiffs’ Motion in Limine No. 1
Plaintiffs move to exclude all evidence and arguments regarding the amounts of money earned by dancers at the Club. Dkt. 643-44. The Court understands this motion to refer to the performance fees paid to the dancers by customers. Plaintiffs argue that such evidence is categorically irrelevant and is potentially inflammatory and therefore prejudicial. Dkt. 644. Defendants counter that evidence of the performance fees paid to the dancers is relevant, in particular, to whether defendants acted willfully in (1) not paying plaintiffs a minimum wage, and (2) deducting fees, fines, and “tip-outs” from these performance fees. Dkt. 693.
The Court denies plaintiffs’ motion, while imposing significant restrictions on the manner in which such evidence can be elicited and on the arguments that the defense can make based on such evidence.
Contrary to plaintiffs’ claim, the fact that dancers at the Club were compensated, and indeed arguably well compensated, by customers is relevant to whether defendants acted willfully, or not in good faith, in denying the dancers a minimum wage. The Court expects that Club officials will testify that they believed in good faith that the dancers were independent contractors. The fact that the dancers were receiving compensation from customers — which was not only well known to, but to some degree facilitated by, the Club, insofar as it set minimum payments for dances and facilitated such payments through the issuance of Dance Dollars — is obviously relevant to defendants’ claim of non-willfulness. See Dkt. 460, reported at Hart v. Rick’s Cabaret Int’l, Inc.,
The alternative account of dancers’ work arrangements that plaintiffs evidently prefer, under which the fact of such .customer payments to dancers would be kept from the jury, would be grossly misleading. It could lead the jury to believe, mistakenly, that the Club’s dancers were receiving no pay, or only marginal pay. The misleading impression that excluding this evidence would create — to wit, that the dancers stood to (or did) earn literally nothing for their work and that the Club’s officials knew this — would necessarily make it more likely that the Club acted willfully in denying the dancers a minimum wage. Excision of this central fact regarding the dancers’ work arrangements at the Club would leave the jury with an impermissibly distorted understanding of the big picture.
The Court will, accordingly, permit defendants to elicit testimony about the information known to them at the time they classified the dancers as independent contractors with respect to the performance fees that dancers, in general, tended to receive from customers. The Court will permit defendants to explain their reasons for classifying the dancers as they did. Such evidence is relevant insofar as it bears on whether defendants acted willfully in not classifying the dancers as employees and in not paying them a minimum
It is no answer for plaintiffs to note that Club officials, in their depositions, apparently did not affirmatively and specifically point to dancers’ receipt of customer pay as a basis for their decision to classify the dancers as independent contractors. Plaintiffs have not pointed to any deposition testimony in which a Club official denied that the fact that the dancers were receiving pay (and substantial pay at that) from an alternative source, customers, was relevant to the Club’s decision to classify them as independent contractors and not pay them a minimum wage. Defendants proffer that Club officials would reference that fact as supporting their classification, and such a claim is quite plausible: Accordingly, the Court will permit evidence to be received as to Club officials’ understandings of the performance fees, in general, that dancers received, insofar as that evidence is elicited in the course of explaining the bases for the Club’s decision to classify the dancers as independent contractors and to deduct sums from their fees. Plaintiffs’ counsel, of course, will be at liberty to cross-examine Club officials as to whether the fact that the dancers stood to receive compensation from customers did, in fact, influence their decision to classify the dancers as independent contractors and not to pay them a minimum wage.
However, the Court will not permit the defense to elicit, for purposes other than showing defendants’ state of mind, evidence of the amounts paid by customers to dancers. There is, for example, no basis for defendants to elicit testimony as to the performance fees in fact paid to any individual dancer, whether in the aggregate or on any particular night. Nor is there any basis for the jury to receive evidence— which defendants indicate in their pretrial submissions that they intend to elicit — of the specific 1099 forms that the Club issued to individual dancers, the tax returns of individual dancers, the “earnings breakdown” of individual dancers, or the earnings that individual dancers received at other clubs. See, e.g., Dkt. 640, Ex. D, 11-24. Such evidence is excluded.
Indeed, the circumstances relating to individual dancers are relevant at trial only insofar as particular dancers are part of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., collective action that pursues minimum-wage claims on Count One. And the dancers’ particular performance fees are irrelevant to the issues — minimum-wage damages and defen
Accordingly, unless plaintiffs’ examination or conduct of the trial opens the door to this subject, the Court will not permit questioning of individual dancers as to the amount of their performance fees. Such evidence, except as linked to defendants’ state of mind, is irrelevant. See Fed. R.Evid. 401. And even if such evidence had some limited relevance, it would be substantially outweighed, under Rule 403, by the high risk of unfair prejudice and confusion that such evidence invites. Quantification of individual dancers’ performance fees would invite, and have an obvious potential to induce, the jury to render rulings against the plaintiffs, potentially on all the issues to be tried, not on the merits, but out of anger, resentment, or indignation that plaintiff dancers stand to receive performance fees and court-awarded minimum-wage payments. See, e.g., Fed.R.Evid. 403 advisory committee’s note (permitting courts to exclude evidence based on “unfair prejudice” and defining that term to mean an “undue tendency to suggest decision on an improper basis, commonly, though not necessarily, an emotional one”); United States v. Peterson,
Defendants, accordingly, are directed not to attempt to elicit such evidence except as tethered to the issue of willfulness. And the Court will instruct the jury that evidence bearing on the payment and scale of dancers’ performance fees is received and may be considered solely for the limited purpose of helping determine defendants’ state of mind. See United States v. Paulino,
II. Plaintiffs’ Motion in Limine No. 2
Plaintiffs move to exclude evidence that dancers agreed, in forms signed before they commenced work at the Club, to be classified as independent contractors. Dkt. 645-46. Plaintiffs note that under the FLSA and the New York Labor Law; (“NYLL”), §§ 190 et seq. & §§ 650 et seq. ', an employee cannot contract out of the right to a minimum wage. Plaintiffs further express concern that defendants will argue, or imply, that the dancers “waived” their rights to a minimum wage. Dkt. 646. Defendants oppose this motion. Dkt. 694.
As with plaintiffs’ Motion in Li-mine No. 1, the Court denies the motion to
Plaintiffs are correct that an employee may not contract away her legal right to be paid a minimum wage. See, e.g., Barrentine v. Arkansas-Best Freight Sys., Inc.,
The Court has already held that the dancers at the Club were employees. See Hart,
Accordingly, the Court will permit the defense to elicit evidence at trial to the effect that the dancers executed forms with the Club designating themselves as independent contractors. Plaintiffs’ counsel, of course, are at liberty, to attempt to establish that the Club had no basis to put weight on this self-designation and, as plaintiffs’ motion implies, that the context in which the dancers self-designated as independent contractors was coercive. As plaintiffs indicate, it may have been clear to a dancer that, if she did not execute the Club’s form, she would not be allowed to work at the Club. But the weight, if any, to attach to the forms completed by the dancers, in determining whether defendants acted willfully, is for the jury to decide. For the same reason, the Court will permit the defense to elicit conversations, if any, between the Club and dancers as to their classification. Such communications, too, may bear on defendants’ state of mind.
However, the Court will not permit evidence to be received, or arguments to be made, on this point other than as it bears on defendants’ state of mind.
Finally, as to evidence admitted on this point, the Court will give the jury an instruction limiting, to the issues of willfulness and good faith, the purposes for which this evidence can be considered. See, e.g., Paulino,
III. Plaintiffs’ Motion in Limine No. 3
Plaintiffs seek to exclude evidence of “industry standards” — which the Court understands to refer to evidence of how other strip clubs have classified their dancers.
The Court’s ruling on this motion is consistent with its rulings on the first two motions in limine: The Court will permit evidence on this point to be received only insofar as it bears on defendants’ state of mind in deciding to classify the Club’s dancers as independent contractors. Therefore, to the extent that officials of Rick’s NY, at the time they made this classification decision, were aware of and claim to have taken into account how dancers were classified at other strip clubs, such state-of-mind evidence may be received at trial. See, e.g., S.E.C. v. Obus,
However, the Court will not permit evidence of other clubs’ practices otherwise to be received in evidence. Where such practices were not known to officials of Rick’s N.Y. at the time they decided how to classify the dancers, such practices are irrelevant to the issues to be tried. They also have significant capacity for confusion and unfair prejudice. As counsel are aware, and as the Court’s September 10, 2013 decision reflects, the legal determination whether a worker is an employee or an independent contractor is a multi-factor inquiry that turns on facts specific to the particular workplace. See Hart,
The Court therefore will preclude any evidence as to industry practices in general. The Court will also preclude evidence as to the classification decisions at other clubs at which the plaintiff dancers may have worked. To the extent that evidence of defendants’ knowledge of how dancers were classified at other clubs is received, the Court will instruct the jury that such evidence is to be considered solely as it bears on defendants’ state of mind. See, e.g., Downing,
IV. Plaintiffs’ Motion in Limine No. 4
Defendants have indicated that they intend to offer at trial, as to each of the 43
The income tax returns have highly limited relevance. There is no claim that they were prepared by or in conjunction with the Club. They therefore have no bearing on the Club’s state of mind. See Kuebel,
On the other side of the Rule 403 balance, the tax returns have substantial capacity to cause unfair prejudice, confusion, and delay. The tax returns are, at best, only marginally relevant to this trial. But the dancer’s recitation of her income from the Club — drawn, almost certainly, from the 1099 form supplied by the Club — is likely to provide a significant source of confusion and distraction. It could prompt the jury to deny plaintiffs’ minimum-wage damages, for the improper reasons that the performance fees the dancer received seemed to the jury “enough” and that payment of minimum wages would therefore represent over-compensation. It could also prompt the jury to be angry at the dancer for not reporting the performance fees paid in cash, but only the subset of those fees reported by Rick’s N.Y. on her 1099 form (ie., those derived from Dance Dollars). See, e.g., supra, pp. 259-60 (citing Fed.R.Evid. 403 advisory committee note; Peterson,
The Court is, further, unpersuaded by defendants’ claim that the returns meaningfully shed light on dancers’ credibility. See Dkt. 711. Given the discrete and largely defendant-centric issues to be tried, the dancers’ testimony in general is of limited relevance at trial. There is little important testimony by individual dancers to discredit. And the dancers’ understatement of their performance-fee income on their returns is itself a product of the
The 1099 forms are similarly inadmissible under Rule 403. The Court will permit the defendants to elicit, at a general level, the fact that it issued 1099 forms to the dancers, consistent with its asserted good-faith belief that the dancers were independent contractors. The Court will also permit the method by which the Club tabulated dancer’s income on the 1099 forms — -ie., including only performance fees paid by Dance Dollars, but excluding those paid in cash — to be brought out in the testimony of Club officials, if defendants believe that point is necessary to give full color to the relationship between the Club and the dancers. However, the content of any individual dancer’s 1099 form is irrelevant. And for the reasons stated above, the recitation of the dancer’s performance fee income (as derived from Dance Dollars) has the capacity to create unfair prejudice and confusion. See supra, p. 264. Defendants are reminded that the Court has already ruled that the dancers are employees. See Hart,
The Court, accordingly, grants this motion in limine. Defendants are precluded from offering into evidence individual dancers’ tax returns or 1099 forms or, without advance permission from the Court, to question witnesses about individual tax returns or 1099 forms.
V. Plaintiffs’ Motion in Limine No. 5
Plaintiffs next move to bar defendants from making arguments or introducing evidence that undermine the various liability rulings the Court has made. Dkt. 652-53. Defendants oppose this motion. Dkt. 703. The Court is sensitive to plaintiffs’ concerns. The Court’s intention is, prior to counsel’s opening statements, to explain clearly to the jury the Court’s relevant prior rulings in the case, as doing so is necessary to identify for the jury and put in context the discrete issues left for them to decide. As the case proceeds, the Court will also be vigilant to ensure that the jury is instructed as to the distinct purposes for which evidence is being received.
Counsel are reminded, however, that certain evidence that might be viewed as undermining a prior ruling may have a separate, valid purpose. See, e.g., United States v. Figueroa,
There is no occasion to address here each example plaintiffs recite that gives rise to their concern. It is by no means clear to the Court that, in fact, there is a bona fide purpose for receipt of every such item of evidence. The Court, however, will make that judgment at trial, in the context of particular offers of proof. It suffices to say that the Court will be attentive to whether there is a proper purpose for all evidence offered and will give appropriate limiting instructions.
However, as to one issue, defendants’ tip-out policy, elaboration is merited. Plaintiffs are correct that the Club had a mandatory “tip-out” policy — the evidence on that point, including the Club’s own pronouncements, is “conclusive.” Dkt. 628, reported at Hart v. Rick’s Cabaret Int'l, Inc.,
VI. Plaintiffs’ Motion in Limine No. 6
In this motion, plaintiffs seek to preclude defendants from making arguments that are inconsistent with the Court’s rulings on class certification and as to class-wide damages. Dkt. 654-55. Defendants oppose this motion. Dkt. 696. Plaintiffs’ motion is framed at a conceptual level and does not appear to be addressed to specific evidence. This motion does not present a crystallized dispute ripe for resolution. See National Union Fire Ins. Co. of Pittsburgh, Pa. v. L.E. Myers Co. Group,
As to plaintiffs’ concern that the Court will permit its rulings to be undercut, the Court wishes, however, to make the following clear: It will not so permit. At the outset of trial, the Court intends to clearly explain to the jury the present posture of the case and to summarize its relevant findings to the extent these findings are necessary to give context to the issues the jury will be asked to decide. And with respect to the open issues on plaintiffs’ claims as to which a class has been certified, it is appropriate, and the Court will instruct the jury, to return a verdict at a class level, rather than with respect to individual class members.
Thus, for example, on the issue of damages on plaintiffs’ NYLL claim for failure to pay a minimum wage (Count Two), the Court will instruct the jury to return a verdict that finds, as a matter of just and reasonable inference, the aggregate hours worked by the class during each period for which a distinct statutory minimum wage existed (on top of the hours worked on the dancer-days for which summary judgment has been granted). Similarly, the jury will be asked to determine damages on plaintiffs’ tip-out claim on a classwide basis. See Hart,
VII. Plaintiffs’ Motion in Limine No. 7
Plaintiffs move to preclude the defense from arguing, in connection with the issue of the calculation of minimum-wage damages, that the dancers in the class were to blame for the gaps in Rick’s NY’s Clubtrax records, in particular, the frequent lack of log-out times. Dkt. 656-57. Defendants oppose this motion; they argue that the plaintiff-friendly Mt. Clemens framework (explained below) cannot apply unless plaintiffs first prove by a preponderance of the evidence at trial that the dancers were not to blame for the inaccurate Clubtrax data. Dkt. 705.
Plaintiffs’ motion is granted. The issue for the jury with respect to damages will solely be to calculate such damages. The jury’s fact-finding assignment will not be concerned with fault. It will be empirical. The jury will be asked to arrive at a reasonable, reliable calculation of aggregate dancer hours on those dancer-days where the Club’s records have been held not to conclusively reflect such hours. The Court will not permit any argument — by either party — that attempts to distract the jury from this assignment by injecting issues of fault.
In opposing this motion, defendants argue that it is error to allow the jury to calculate dancers’ hours as a matter of just and reasonable inference, because it was not the Club’s fault that its records as to dancer hours were persistently deficient. The Court has previously held that the Club was responsible for maintaining accurate records of its employees’ hours and for the glaring deficiencies in its time records; the Court has also held that, under Anderson v. Mount Clemens Pottery Co.,
Employers have a duty to keep accurate records of their employees’ hours. See 29 U.S.C. § 211(c); Kuebel,
The rationale for this “relaxed” burden is" apparent. Once “liability for wage violations has been established, ‘[t]he uncertainty lies only in the amount of damages arising from the statutory violation by the employer. In such a case it would be a perversion of fundamental principles of justice to deny all relief to the injured person, and thereby relieve the wrongdoer from making any amend for his acts.’ ” Hart,
It is an established fact in this case— indeed, an undisputed one — that “Rick’s N.Y. maintained incomplete records” with respect to, inter alia, dancers’ hours. Hart,
Under such circumstances, the Mt. Clemens framework clearly applies, as the Court has previously held. Further, as the Court has recognized, Dr. Crawford’s methodology and model — which select reasonable, reliable proxies to fill the gaps in the Clubtrax data — is “sufficiently sound to satisfy Mt. Clemens’ ‘just and reasonable inference’ standard.” Hart,
Notably, as to the claim that defendants now raise — that plaintiffs, not the Club, were responsible for the Club’s persistently deficient data — defendants failed to raise this claim in the course of litigating either of the two decisions in which this Court has addressed the Mt. Clemens line of cases and held it applicable. See Hart,
In any event, on the merits, defendants’ attempt to shift blame to plaintiffs for the Club’s errant hours is extremely unconvincing. Defendants first argue that, as a matter of law, for plaintiffs to be entitled to prove damages under the relaxed Mt. Clemens’ framework, rather than by proving specific hours worked for each dancer-day during the class period, the jury must first decide that plaintiffs are not to blame for the inadequacy of' the Clubtrax records. Defendants do not cite any authority so holding. Defendants primarily rely on Seever v. Carrols Corp.,
Seever, however, predated the Second Circuit’s decision in Kuebel, which explicitly called Seever into question:
Here, however, the district court determined that Kuebel was not entitled to Anderson’s lenient burden of proof. Relying on Seever v. Carrols Corp.,528 F.Supp.2d 159 (W.D.N.Y.2007), it held that because Kuebel was responsible for filling out his own timesheets and had admittedly falsified them, such that any inaccuracies were “self-created,” a heightened standard applied under which Kuebel must “prove the amount of time he worked off-the-clock with specificity.” [Kuebel v. Black & Decker (U.S.) Inc.] Kuebel II,2010 WL 1930659 , at *11,2010 U.S. Dist. LEXIS 46533 , at *32. Because Kuebel could not prove his damages with precision, the district court concluded that summary judgment was appropriate.
We disagree with this approach. First, it is important to recognize that an employer’s duty under the FLSA to maintain accurate records of its employees’ hours is non-delegable. See 29 U.S.C. § 211(c); Caserta, v. Home Lines Agency, Inc., 273 F.2d 943 , 944, 946 (2d Cir.1959) (Friendly, J.) (rejecting as inconsistent with the FLSA an employer’s contention that its employee was precluded from claiming overtime not shown on his own timesheets, because an employer “cannot ... transfer his statutory burdens of accurate record keeping, and of appropriate payment, to the employee” (citation omitted)); see also Holzapfel v. Town of Newburgh,145 F.3d 516 , 524 (2d Cir.1998). In other words, once an employer knows or has reason to know that an employee is working overtime, it cannot deny compensation simply because the employee failed to properly record or claim his overtime hours. Accordingly, the fact that an employee is required to submit his own timesheets does not necessarily preclude him from invoking Anderson’s standard where those records appear to be incomplete or inaccurate. See Skel-ton v. Am. Intercontinental Univ. Online,382 F.Supp.2d 1068 , 1071 (N.D.Ill. 2005) (“The FLSA makes clear that employers, not employees, bear the ultimate responsibility for ensuring that employee time sheets are an accurate record of all hours worked by employees.”). •
Kuebel,
Defendants overlook the critical fact that Kuebel described the employer’s duty to maintain accurate records as “non-dele-gable.” The Second Circuit also cited, with approval, case law to the effect that an employer “cannot ... transfer his statutory burdens of accurate record keeping, and of appropriate payment, to the employee.” Caserta,
In any event, even assuming that Seever (or similar logic) might apply in some contexts — for example, where an employer’s system was fully compliant and an employee’s manipulative behavior was to blame for any shortcomings' — the facts of this case are light years from that scenario (and from the facts of Seever). By any reasonable measure, the flaws in the Club-trax system were epidemic and systemic. There was missing or concededly inaccurate logout data as to more than half of the dancer days (more than 80,000) during the class period. This is not, therefore, a case where a small cadre of willfully disobedient employees deliberately falsely presented their hours. Rather, it is a case of an overall system failure. Responsibility rightly falls on the Club, which controlled and was in position to monitor that data, not, as defendants posit, on coordinated misconduct by nearly 2,000 dancers over a seven-year period.
Moreover, in light of the Club’s classification of the dancers as independent contractors, there was no financial incentive for dancers to electronically sign out. The dancers’ recorded hours did not have any impact on their compensation, which was paid by customers, not the Club. The dancers were not on notice that their recorded hours mattered — and, under the compensation system designed by the Club, they did not. Under this circumstance, Seever is particularly inapt, for a dancer who was unaware that a failure to record hours could affect her compensation cannot be said to be at fault for her inability years later to reconstruct her precise hours on a particular day. Indeed, despite the extensive discovery taken in this case, defendants cite no evidence that any dancers deliberately falsified anything as to their hours. On the assembled record, the evidence instead is that the Club failed,
The Court therefore rejects defendants’ bid to force the dancers to reconstruct their hours, years after the fact, on a day-by-day basis, as opposed to, under Mt. Clemens, by a matter of just and reasonable inference. This bid reflects, in fact, uncommon chutzpah. Having gambled that its classification of the dancers as customer-compensated independent contractors would go unchallenged or withstand scrutiny, the Club cannot now blame the dancers for failing to maintain their time records in a manner befitting time-compensated employees — a different compensation paradigm which the Club rejected. Plaintiffs’ hours, therefore, are to be established at trial as a matter of just and reasonable inference. Defendants are at liberty to combat plaintiffs’ proof on that point, see, e.g., Hart,
VIII. Plaintiffs’ Motion in Limine No. 8
Plaintiffs next move to preclude evidence and arguments as to (1) the motivation and conduct of class counsel, and the fact that their geographical home-base is outside of New York; (2) the opt-out rate within the class; (3) advertising by class counsel; and (4) lawyer-driven lawsuits. Dkt. 658-59. Defendants, remarkably, oppose this motion as to the final three topics. Dkt. 697. These subjects are categorically irrelevant and have no place in this lawsuit. And even if evidence of them had any slight relevance, it would be substantially outweighed by the capacity of such evidence and lawyer arguments to confuse the jury and create unfair prejudice. The Court accordingly precludes evidence on these subjects and directs counsel, in no uncertain terms, neither to refer to these subjects nor to make arguments about them.
As to the first topic, defendants agree not to comment on the motivation or conduct of class counsel or the fact that class counsel is not from New York City. Dkt. 697. The Court agrees that these subjects are categorically irrelevant, as is, for that matter, the motivation, conduct, and geographic home-base of defense counsel. The Court directs counsel not to disclose, comment on, or seek to elicit evidence as to, any of these subjects, including the residence or geographic base of any counsel (plaintiffs’ or defendants’) in the case. There is no valid reason for the jury to know the residence or home-base of counsel. And defendants’ proposed voir dire, which adverts to this issue, see Dkt. 640, Ex. L, 3, would improperly inject local bias into the case. See, e.g., Pappas v. Middle Earth Condo. Ass’n,
The jury must also, and will, know the number of plaintiffs, 41, who have opted in to the FLSA claim brought in Count One. See Hart,
As to plaintiffs’ counsel’s advertising efforts, this subject too is irrelevant. And evidence as to it would serve, potentially, to alienate the jury, by converting the trial into a referendum on lawful practices by plaintiffs’ counsel. See, e.g., Bufford v. Rowan Cos.,
In opposing this motion, defendants state that if the jury is permitted to learn that the Club’s parent entity, RCII, later entered into agreements with dancers at other Clubs that precluded class actions, such evidence would open the door to evidence as to plaintiffs’ counsels’ advertising practices as to Rick’s NY. That argument does not logically follow. The Court addresses, infra, and grants, the Club’s motion in limine to preclude evidence of these agreements with dancers at affiliated clubs. But whether or not such evidence were admitted, it would not make the professional conduct of plaintiffs’ counsel, including in the area of advertising, probative of any issue to be tried. The Court accordingly orders that no comments or arguments as to this point be made at trial.
Finally, plaintiffs seek to preclude commentary or arguments generally as to lawyer-driven lawsuits. Dkt. 658-59. The Court grants this motion, too. See, e.g., Koufakis v. Carvel,
IX. Plaintiffs’ Motion in Limine No. 9
At trial, plaintiffs state that they intend to call as witnesses, inter alia, the two named plaintiffs and seven of the 25 opt-in plaintiffs who were deposed in this case. Dkt. 640, Ex. C. The defendants state that they intend to call the two named plaintiffs and all 25 of those opt-in plaintiffs. Id. Ex. D. With respect to the nine dancers whom both sides intend to call as witnesses in their respective cases-in-chief, plaintiffs move “to prevent defendants from reserving cross-examination” of those nine dancers. Dkt. 660-61. Plaintiffs explain that “it would be inefficient, potentially redundant, and certainly unduly burdensome and harassing to require the entertainers at issue to testify more than once at trial.” Dkt. 661, at 2. Defendants oppose plaintiffs’ motion, on the ground that plaintiffs have not demonstrated a witness-specific inconvenience for each to testify in plaintiffs’ case and later in the defense case, and that defendants have a right to conduct a direct examination of each of these dancers. Dkt. 698.
Notwithstanding the infelicitous manner in which plaintiffs’ motion is labeled, i.e., as a motion “to prevent defendants from reserving cross-examination,” Dkt. 660, it is clear from plaintiffs’ articulation of it in their memorandum of law that the motion at its heart aims to avoid having these dancers called to testify at different stages of the trial: once in plaintiffs’ case, and later in the defense case. See Dkt. 661, at 2 (“[I]t would be inefficient ... and ... burdensome ... to require the entertainers at issue to testify more than once at trial.”). The Court agrees that there are compelling reasons, sounding in trial efficiency, avoidance of redundancy, and in avoiding needless inconvenience to the nine plaintiffs that plaintiffs’ counsel intends to call, to avoid recalling them on a later date in this trial. Accordingly, assuming that these nine witnesses testify, plaintiffs’ motion is granted: The Court intends to structure trial so that these witnesses need only take the stand once. However, the Court will modify plaintiffs’ request — which on its face is blind to defendants’ trial rights — so as to ensure that defendants can exercise their right to conduct a full direct examination of these witnesses.
Under Federal Rule of Evidence 611, “[t]he court should exercise reasonable control over the mode and order of examining witnesses and presenting evidence so as to: (1) make those procedures effective for determining the truth; (2) avoid wasting time; and (3) protect witnesses from harassment or undue embarrassment.” The Court has “wide latitude” in controlling the mode and order of evidence under Rule 611. Ladenburg Thalmann & Co. v. Modern Cont’l Const. Holding Co.,
A recent decision by Judge Nathan, cited by defendants, helpfully summarizes the law in this area. “To prevent unfairness and avoid wasting time, numerous courts have held that a party may not limit a witness that the party intends to call at trial from testifying only during its own case in chief. Instead, the party must either permit its opponent to directly examine the witness, so that both parties may elicit the witness’s live testimony during their cases in chief, or rely itself on the witness’s deposition testimony, so that neither party may elicit the witness’s live testimony during its case in chief.” Buchwald v. Renco Grp., Inc., No. 13 Civ. 7948(AJN),
But these principles are distinct from the question of trial structure — in essence, when those witnesses will testify. As Judge Nathan further explained in Buchwald, in a portion defendants notably omit to cite, “to spare the witnesses the burden of remaining at trial for any longer than necessary, the Court intends to structure trial such that each witness will take the stand only once, at which time both the [plaintiffs] and Defendants will have the opportunity to elicit their testimony for their cases in chief.” Id. There is firm support for this approach in Federal Rule of Evidence 611, which gives district courts authority to “exercise reasonable control over the mode and order of examining witnesses and presenting evidence,” as well as Federal Rule of Civil Procedure 1, which states that the Federal Rules “should be construed and administered to secure the just, speedy, and inexpensive determination of every action and proceeding.” See, e.g., id.
The facts here compellingly lead the Court to adopt the same approach as did Judge Nathan — which is, furthermore, a “standard trial practice[ ].” Id. at *3. Defendants have not articulated any valid reason to force nine former employees to inconvenience themselves by traveling to this courthouse and testifying on multiple days, potentially a week or more apart, in this case. It is inherently inconvenient to force a witness to travel to court and rearrange her ordinary work and home schedule to testify. And defendants fail to articulate any concrete harm to them presented by consolidating such witnesses’ testimony at a common time so as to avoid this inherent inconvenience. Indeed, it is apparent from defendants’ submissions that defendants insist that these nine witnesses be called both during plaintiffs’ case
The Court looks askance at such tactics. And the Court reminds the defense that, given the Court’s summary judgment rulings and the resulting discrete issues to be tried, the dancers’ testimony is of limited relevance at trial. This testimony certainly bears on damages issues. But there has been no proffer as to why this testimony has any relevance to whether defendants’ classification decision was willful or as to which of the corporate defendants were plaintiffs’ employers. The testimony of these plaintiffs ought to be brief and targeted to the discrete issues to which it is relevant; the Court will ensure that such testimony does not become an occasion for distraction, bullying, or creating unfair prejudice. The practical reality of the limited relevance of these witnesses’ testimony strongly reinforces the argument that they not be recalled to testify on a day distant from their initial testimony. And defendants have long been aware of the issues to be tried and of the facts and record developed during the extensive discovery taken in this case. Defendants have also had the opportunity to depose these witnesses. Defendants therefore cannot credibly claim an inability to fully examine these witnesses on all relevant issues at the time they are called.
The Court, accordingly, will structure trial to assure that the plaintiff witnesses in question testify only once, but that, at the time these witnesses are called, defendants have a full opportunity to examine the witness. At the conference to be held on March 13, 2015, the Court will solicit from counsel their views as to the appropriate mechanism for achieving this end. One possibility is to permit defense counsel to expand the scope of cross-examination to encompass the full direct examination of the witness that the defense intends. Another is to permit defense counsel, immediately after completion of questioning of the witness as called by plaintiffs’ counsel, to then call that witness out of turn and conduct a plenary direct examination of that witness. Counsel, particularly defense counsel, should be prepared to state their views (at the March 13, 2015 conference) as to which of these approaches they prefer.
X. Defendants’ Motion in Limine No. 1
Defendants seek to preclude evidence of court decisions pertaining to whether dancers at exotic clubs should be classified as employees or independent contractors. Defendants argue that these decisions are irrelevant to the issues of defendants’ willfulness and/or lack of good faith, and are also inadmissible under Rule 403 because they would tend to confuse the jury and impair the Court’s ability to instruct the jury on the law. Dkt. 664-65. Plaintiffs counter that such cases, if handed down before or during the class period, are relevant to defendants’ state of mind, either because defendants were aware of a body of case law that included many cases holding exotic dancers to be employees, not independent contractors, or because defendants’ reckless disregard for this body of law itself is evidence of their willfulness and lack of good faith. Dkt. 685.
Plaintiffs, for their part, are entitled to test those claims of non-willfulness and good faith. “To establish the requisite subjective ‘good faith,’ an employer must show that it took active steps to ascertain the dictates of the FLSA and then act to comply with them.” Hart,
It is relevant and likely highly probative to willfulness and good faith what the Club’s reasoning was, in the face of this case authority, in classifying the dancers as independent contractors. Did the Club not research the case law? Did it research the law and fail to spot any of these cases? Did the Club find the cases but remain unpersuaded by them? Or, did it find the cases persuasive on their facts but believed that the circumstances at Rick’s N.Y. were distinct from the cases holding dancers to be employees? Plaintiffs may reasonably ask the jury to assess defendants’ state of mind in light of Club officials’ answers, under oath, to these questions. Plaintiffs may also reasonably ask the jury to make credibility findings about such testimony. To the extent defendants may disclaim any knowledge of court decisions in this area, plaintiffs may argue that this claim of ignorance is unworthy of belief, particularly given the statements in RCII’s Forms 10-K dating back to 2005 that acknowledge that the Club might be “required in all states to convert dancers who are now independent contractors into employees.” Dkt. 692 Ex. 62, at 2. As with the subject of industry standards, the Court will instruct the jury that this evidence is being received solely as it bears on defendants’ state of mind.
To be sure, the means by which the jury is notified of the state of the law as to the status of exotic dancers during the relevant period must comport with Rule 403. Plaintiffs propose to introduce the actual, physical court decisions — some 20 in total — into evidence. See Hart,
However, it is imperative that the jury be given a fair, and neutral, portrait of the state of the law in this area during the class period. Such knowledge is important to enable the jury to assess fairly defendants’ claims of non-willfulness and of good faith, and plaintiffs’ claims that defendants either flouted or consciously disregarded adverse precedents. Further, were the jury left unaware as to the actual state of the law regarding dancer classifications, counsel’s questioning of Club officials as to their assessment of this law, as relevant to the issues of willfulness and good faith, might leave the jury with a badly skewed impression as to the state of this law. Without such guidance, the jury would be hamstrung in objectively assessing defendants’ professed state of mind to the extent that the jury found defendants’ assessments of the existing legal background to be probative.
The Court’s present judgment is that the proper means to educate the jury on this point is for the Court to take judicial notice of the body of precedent in this area. See, e.g., Fed.R.Evid. 201 (“The court may judicially notice a fact that is not subject to reasonable dispute because it ... can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.”); Int’l Star Class Yacht Racing Ass’n v. Tommy Hilfiger U.S.A., Inc.,
XI. Defendants’ Motion in Limine No. 2
Defendants next move to exclude evidence and arguments concerning the defendants’ financial information and/or financial circumstances since the close of discovery. Dkt. 666-67. Plaintiffs oppose this motion. Dkt. 686. Defendants’ motion is granted.
Unlike the other motions that the parties filed in limine, the Court has already addressed, in an earlier order, most
On February 13, 2015, the Court issued an order denying plaintiffs’ request to reopen discovery, but directing defendants to preserve all the evidence sought by plaintiffs, noting that such evidence might become discoverable and relevant following trial. Dkt. 704. The Court noted that the records plaintiffs sought did not speak to defendants’ state of mind at the relevant time for the issues to be tried — the class period. Id. (citing Lewis,
The Court’s earlier order resolves the vast majority of the parties’ arguments on this motion in limine. The only as-yet unaddressed issue is defendants’ motion to preclude plaintiffs from asking Eric Lan-gan, president of RCII, RCI, and Peregrine, about “defendants’ litigation reserve (or lack thereof) to pay a judgment in this case and defendants’ intention (or lack thereof) to place Peregrine in bankruptcy and transfer business to Vivid [a separate club owned by RCII] in the event of a judgment.” Dkt. 667 (citing Plaintiffs’ Witness List). The Court grants defendants’ motion.
First, there is no basis for allowing plaintiffs to ask about defendants’ litigation reserve. It is not relevant to defendants’ state of mind at the time of the events at issue. And to the extent it speaks to defendants’ state of mind as of the time this lawsuit was filed (which was within the class period), it logically addresses the monetary risk presented by this lawsuit rather than the actual assessment of the whether the classification was correct, or believed to be correct, at the time made. See, e.g., Mirarchi v. Seneca Specialty Ins. Co.,
Furthermore, under Rule 403, such evidence would have significant capacity both to confuse the jury and to unfairly prejudice defendants. In the event that defendants’ litigation reserve is substantial, admission of such evidence would essentially
For the same reasons, the Court similarly precludes evidence and argument about the defendants’ alleged intention to place Peregrine in bankruptcy and transfer business to Vivid in the event of a judgment. This topic is irrelevant to all issues at trial, and inflammatory; it, too, would invite a decision based on impermissible considerations. And the Court has already made quite clear that it will look askance at, and forcefully respond to, any fraudulent conveyances, if established after trial, so as to assure that the judgment against Peregrine is not improperly frustrated. See Dkt. 704.
XII. Defendants’ Motion in Limine No. 3
Defendants next move in limine to exclude evidence of the operations of clubs affiliated with RCII other than Rick’s NY. Dkt. 669-70. In particular, defendants move to exclude evidence plaintiffs propose to adduce of agreements which those affiliated clubs entered into in 2011, following the onset of this litigation, which required dancers at those clubs to sign arbitration agreements containing class-action waivers. Defendants argue that such evidence is both non-probative and unfairly prejudicial. Plaintiffs take the opposite view and construe the arbitration agreements as evidencing defendants’ “knowledge — or at least awareness of the risk — that they were violating the law by classifying entertainers as independent contractors.” Dkt. 687.
The Court grants defendants’ motion in limine. The Court concludes, emphatically, that this evidence — indeed, all evidence as to the conduct of such affiliated clubs as it relates to the status and employment conditions of dancers — must be excluded. The Rule 403 balance as to such evidence lopsidedly favors its exclusion.
To begin with, these agreements do not, as plaintiffs posit, see Dkt. 687, reflect awareness by the Club that the practice at Rick’s N.Y. of classifying dancers as independent contractors was illegal. On the contrary, these agreements self-evidently reflect a business reality: the fact that the Club had been sued in this case and foresaw the risk of future lawsuits. In the face of such litigation, it made eminent business sense for RCII to try, by agreement, to preclude dancers at other establishments from litigating in court or initiating a class action. Such arbitration agreements, containing class-action waivers, have widely been upheld, including by the Supreme Court, see AT & T Mobility LLC v. Concepcion,
The Court has carefully reviewed the exemplars of the 2011 agreements, as provided to the Court by counsel. There is nothing in these agreements that can be fairly read as admitting that it was unlawful to treat the dancers at RCII’s clubs in general, or Rick’s N.Y. in particular, as independent contractors.
And the snippets of testimony about the class-action waivers on which plaintiffs rely, including that of Eric Langan, president of RCII, RCI, and Peregrine, do not do so either. Mr. Langan’s quoted testimony merely reflects that RCII’s business response to plaintiffs’ lawsuit was not to re-classify strippers at RCII’s other clubs as employees. Instead, Mr. Langan states, RCII elected to attempt to deter future challenges to the clubs’ classifications of their dancers as independent contractors by forcing dancers at these clubs, as a condition of future work, to enter into arbitration agreements with class-action waivers. Plaintiffs’ counsel may disdain this hardball response to litigation, and they may regard the case law upholding such waivers as wrong-headed. But it is simply incorrect to characterize defendants’ introduction of such agreements as admitting wrongdoing or evidencing the Club’s willfulness or lack of good faith.
In any event, even if this response by RCII to this litigation could be interpreted as a form of admission of wrongdoing— and it cannot — the countervailing considerations under Rule 403 would clearly compel exclusion of such evidence. Introduction of such evidence would occasion the classic “trial within a trial” that Rule 403 seeks to prevent. See, e.g., United States v. Aboumoussallem,
It would require the jury, first, to assess whether the conditions of employment at RCII’s other clubs were akin to those at Rick’s NY, so as to make relevant to this case the Club’s 2011 actions with respect to dancers at its other Clubs. It would then require the presentation of evidence as to the business decision to require dancers at RCII’s other clubs, going forward, to enter into arbitration agreements with class-action waivers. This evidence would potentially be protracted. Not only would the jury need to receive and understand these agreements: To assess whether the agreements were an admission of prior wrongdoing, as plaintiffs claim, or a hardheaded business decision aimed at reducing litigation risk presented by RCII’s other clubs, the parties would invariably have to present extended evidence from decision-makers as to the evolution and reasons behind this decision. The Court would also be called upon to explain, as relevant, the applicable legal principles and to give the jury limiting instructions.
In the end, in the Court’s assessment, this exercise into examining a collateral
For all these reasons, the Court grants defendants’ motion. The parties are precluded from offering any evidence as to the classification or treatment of dancers at any other club run by RCII, including specifically RCII’s 2011 agreement with dancers at other clubs which bound those dancers to arbitrate, in a non-class context, their disputes with RCII and its affiliates.
XIII. Defendants’ Motion in Limine No. 4
Defendants next move to preclude evidence concerning their assets and liabilities, accounting practices, business plans and transactions, and private ownership of stock, including Peregrine’s general ledger and intercompany transfer ledger, as well as RCI’s general ledger. Dkt. 672, 674. Plaintiffs oppose this motion, arguing that these records are relevant to defendants’ willfulness and to whether defendants RCI and RCII were joint employers, with Peregrine, of the plaintiff dancers. Dkt. 688.
The Court grants this motion in part, denies it in part, and reserves in part, depending on the specific category of evidence at issue. The Coúrt evaluates each category of evidence with the same threshold principles in mind — including the principles for determining whether an entity is an employer. See generally Hart,
To the extent plaintiffs propose to introduce evidence of inter-corporate transfers of money, or the assets or wealth of the various corporate defendants, following the close of the class period, that evidence is excluded. See Dkt. 704. The Court has previously addressed this issue in the course of addressing defendants’ second motion in limine. See supra, pp. 277-79. This evidence does not bear on the relationship between the corporate entities during the class period. It would only slightly help establish bias of defendants’ witnesses, a point that can readily be made by other means. And such evidence would have significant potential to lead the jury to resolve the joint employer issue not based on the legally relevant factors, but on assuring that defendants with sufficient assets to fund the judgment in this case are found liable.
The Court will, however, permit evidence of transfers of money among the corporate entities during the class period, insofar as such evidence is relevant to the joint employer issue. For avoidance of doubt, this evidence will not be received to prove an attempt to drain Peregrine of money to make it judgment-proof, and
Similarly, to the extent plaintiffs propose to offer evidence of defendants’ corporate structure, and the roles played by officials with connections to multiple defendant entities, such as Mr. Anakar or Mr. Langan, such evidence is admissible. Such evidence is helpful to the jury in explaining the relationship among the corporate defendants, which is important both as a matter of enhancing the jury’s understanding of these entities, and to resolving the joint employer issue — whether the non-Peregrine defendants were also plaintiffs’ employers. See Hart,
To the extent plaintiffs propose to introduce evidence of defendants’ “accounting practices,” such evidence may prove admissible; some of defendants’ accounting practices may well bear on the joint-employer question.- However, plaintiffs have not made a specific proffer as to what such evidence is, and therefore have failed to demonstrate to the Court, at this point, that such evidence has any bearing on any issue to be tried. Accordingly, the Court reserves on this issue, pending a more specific articulation by the plaintiffs of the concrete accounting practices at issue. See Nat’l Union,
Finally, to the extent plaintiffs propose to introduce evidence of statements in any of defendants’ Forms 10-K or 10KSB (or other public filings or publicly disseminated documents) with respect to the Club’s practice of treating dancers as independent contractors, such evidence is admissible, as the Court’s summary judgment decision implicitly recognized. See Hart,
Defendants also move in limine for a ruling that plaintiffs cannot obtain liquidated damages under both the FLSA and the NYLL. Dkt. 677-78. The Court denies that motion as premature. Unless and until the jury renders a verdict supporting both forms of damages, there will be no occasion to address the compatibility of such damages. See, e.g., Torah Soft Ltd. v. Drosnin, No. 00 Civ. 0676(JCF),
XV. Defendants’ Motion in Limine No. 6
Defendants next move to preclude evidence and arguments regarding settlement offers and offers of judgment made to various plaintiff dancers which plaintiffs, in the joint pretrial order (Dkt. 640, Ex. C), indicate they intend to offer in evidence. Dkt. 679-80. In brief, the evidence at issue concerns offers of judgment to dancer Nicole Imbeault, which resulted in a settlement, and to named plaintiffs Sabrina Hart and Reka Furedi, which did not. Plaintiffs also seek to solicit testimony from defendants’ president Eric Langan about “the decision to make Rule 68 offers of judgment in the Nicole Imbeault matter and in this matter and the amount of those offers.” Id. Defendants also seek to preclude their offers of settlement in other cases. Plaintiffs oppose this motion. Dkt. 690.
The Court grants defendants’ motion in limine in its entirety. For the reasons that follow, these settlement offers are clearly inadmissible. There is a strong argument that these settlement offers are all inadmissible under Federal Rule of Evidence 408 and Federal Rule of Civil Procedure 68. And even if they were not, the pertinent factors under Rule 403 overwhelmingly dictate that this evidence be excluded. The Court accordingly directs that plaintiffs not seek to introduce, or in any way refer, to any settlement position, discussions, or offer made by defendants in this or any other case.
Federal Rule of Civil Procedure 68 provides, in relevant part: “[A] party defending against a claim may serve on an opposing party an offer to allow judgment on specified terms, with the costs then accrued.... An unaccepted offer is considered withdrawn, but it does not preclude a later offer. Evidence of an unaccepted offer is not admissible except in a proceeding to determine costs.” Fed. R.Civ.P. 68(a)-(b) (emphasis added). “Rule 68 is a cost-shifting rule designed to encourage settlements without the burdens of additional litigation.” Stanczyk v. City of New York,
Federal Rule of Evidence 408, in turn, furthers “the policy of promoting compromises.” Starter Corp. v. Converse, Inc.,
(a) Prohibited Uses. Evidence of the following is not admissible — on behalf of any party — either to prove or disprove the validity or amount of a disputed claim or to impeach by a prior inconsistent statement or a contradiction:
(1) furnishing, promising, or offering — or accepting, promising to accept, or offering to accept — a valuable consideration in compromising or attempting to compromise the claim; and
(2) conduct or a statement made during compromise negotiations about the claim — except when offered in a criminal case and when the negotiations related to a claim by a public office in the exercise of its regulatory, investigative, or enforcement authority.
(b) Exceptions. The court may admit this evidence for another purpose, such as proving a witness’s bias or prejudice, negating a contention of undue delay, or proving an effort to obstruct a criminal investigation or prosecution.
Fed.R.Evid. 408. Although Rule 408 is not “a blanket rule of inadmissibility,” its obvious purpose “is to facilitate open and wide-ranging settlement discussions.” Carr v. Health Ins. Plan of Greater N.Y., Inc., No. 99 Civ. 3706(NRB),
Peregrine Enterprises, Inc., a defendant in this action, offers to allow judgment to be taken against it by the plaintiff for the sum of Thirty-Six Thousand Dollars ($86,000.00), plus costs, including reasonable attorneys’ fees, accrued to this date. This offer is made pursuant to Rule 68 of the Federal Rules of Civil Procedure, and evidence of this offer is not admissible except in a proceeding to determine costs. This offer is not to be construed either as an admission that the Defendants are liable in this action, or that the Plaintiff has suffered any damage. If this offer is not accepted in writing within ten (10) days after it is served, it will be deemed withdrawn.
Dkt. 680 (citing Nicole Imbeault v. Rick’s Cabaret Int’l, Inc., No. 08 Civ. 5458(GEL), Dkt. 17 Ex. A) (emphasis added). Plaintiffs’ counsel in this case cannot disclaim knowledge of these limitations: They represented Ms. Imbeault. See id. Defendants’ offers to the named plaintiffs in this case, Hart and Furedi, are identical to the above-quoted offer in all material respects; they differ only in the amount offered.
Moreover, even if admission of defendants’ offers of judgment and the settlement of the Imbeault matter were otherwise permitted, the Court would — without any difficulty — hold this evidence inadmissible under Rule 403. As to the disputed issue of willfulness, the fact of a settlement offer has only limited probative value. It certainly reflects awareness by defendants of the fact that a dancer might make or had made a claim for relief based on an asserted entitlement to minimum wages. Arguably, the fact of such an offer might be said to reflect a determination by defendants that such a claim was non-frivolous, or at least sufficiently likely to result in protracted litigation to merit a settlement offer in the interest of avoiding legal risk and expense.
However, the fact of such an offer is a far cry from an acknowledgment by the Club that it had misclassified dancers. As plaintiffs’ counsel are assuredly aware, settlement offers are commonly made where both parties adhere to their positions on the merits, but where settlement nonetheless makes sense as a business matter. See, e.g., In re Arotech Sec. Litig., No. 07 Civ. 1838(RJD)(WP),
The case law that has sometimes permitted the fact of prior lawsuits, incidents, and regulatory claims to be admitted as .proof of knowledge of illegality is inappo-site. To begin with, those cases principally involved earlier claims against a defendant, which were said to put defendants on notice as to the potentially unlawful nature of its practices or products. See, e.g., Worsham v. A.H. Robins Co.,
Under these circumstances, plaintiffs’ counsel’s bid to use their filing of (and defendants’ effort to settle) this lawsuit and its immediate predecessor against defendants on the issue of knowledge is a far cry from the circumstance presented by a prior lawsuit, regulatory action, or legal ruling. On the contrary, permitting the fact of the Imbeault, Hart, and Furedi claims and settlement offers to be admitted as evidence of knowledge on the grounds that the challenged practices continued after the filing of their lawsuits would be an invitation to bootstrapping.. It would allow plaintiffs to file suit, solicit settlement offers, and perhaps receive them; define the class period to extend past the filing date of the lawsuit; and then use the fact of the suit or the settlement offers as proof at trial of defendants’ willfulness for not changing course after the suit was filed. This practice, in turn, would be a sure deterrent to pretrial settlement. None of the cases on which plaintiffs rely supports, let alone compels, admission of the evidence at issue here.
Furthermore, any limited relevance presented by the fact of these lawsuits and settlement offers would be overwhelmed by the possibility of confusion, unfair prejudice, and delay. There would be a very significant risk that a jury would misunderstand the fact of a settlement offer as an admission of liability, even though, by its terms and viewed in its context, it is not. It would also open the door to evidence and argument about defendants’ motivations in seeking an early settlement of this and the Imbeault action, so as to enable defendants to explain why the settlement offer did not bespeak an admission of liability. This subject would, in turn, invariably open the door to questioning about the economics of class litigations. It goes without saying that these subjects have enormous capacity to introduce unfair prejudice — primarily to defendants, but also potentially to plaintiffs — and also delay. See Fed.R.Evid. 403.
In light of these factors, permitting plaintiffs to introduce this evidence would create a large and unacceptable risk of inviting a “trial within a trial,” as the parties sought to help the jury decode the meaning of defendants’ prior settlement offers. See, e.g., Beastie Boys v. Monster Energy Co.,
The Court, accordingly, precludes any party from introducing or referring to the fact of the Imbeault suit or to the settlement offers made to Imbeault, Hart, and Furedi, or any other employee at any club. The Court also precludes plaintiffs’ counsel from arguing that the fact that defendants persisted in classifying dancers as independent contractors after the filing of this suit is evidence of willfulness, and defense counsel from arguing the contrary. Nor, finally, may any party question any witness (including for purposes of impeachment) about settlement offers made to any dancer. For avoidance of doubt, the entire subject of settlement is, categorically, off limits at trial.
XVI. Defendants’ Motion in Limine No. 7
Finally, defendants move to exclude evidence and argument concerning two email exchanges that plaintiffs have listed as trial exhibits. Dkt. 640, Ex. C. Defendants
The Court denies defendants’ motion, but orders the emails at issue to be redacted in accordance with plaintiffs’ pretrial submissions (specifically, Dkt. 692, Exs. 92-93). The emails are clearly relevant to the joint-employer issue. The redacted aspects of the emails, however, do not speak to that issue, but instead contain prejudicial material, including commentary that could lead a juror to view Club officials as cynical or heartless. Because these portions do not add to the probative value of the emails and could prove unfairly prejudicial, see Fed.R.Evid. 403, redaction as proposed by plaintiffs is appropriate.
CONCLUSION
The parties motions in limine are resolved as addressed herein. The Clerk of Court is respectfully directed to terminate the motions pending at docket numbers 643, 645, 648, 650, 652, 654, 656, 658, 660, 664, 666, 669, 672, 677, 679, and 681.
SO ORDERED.
Notes
. A recent stipulation by the parties makes clear that, for purposes of the case caption, defendant Rick’s Cabaret International, Inc. ("RCII”) is now known as "RCI Hospitality Holdings, Inc.” See Dkt. 712. For consistency with prior opinions in this case, though, the Court refers to three defendants as Peregrine Enterprises, Inc. ("Peregrine”); RCI Entertainment New York ("RCI”); and RCII.
. See, e.g., Hart,
. See, e.g., Gagen v. Kipany Prods., Ltd.,
. The relevant issue (of those left for trial) is whether the defendants’ misclassiftcation of the dancers and failure to pay them minimum wages was "in good faith,” "willful,” or otherwise. These inquiries focus on the employer’s state of mind. See Kuebel v. Black & Decker Inc.,
. The fact that the 1099 forms were issued by Peregrine Enterprises, Inc. is relevant to the issue of which defendant(s) were plaintiffs' employers. But there is no need to admit the individual 1099 forms to establish that discrete and undisputed point (to which plaintiffs offer to stipulate).
. The Court has subsequently noted that another, simpler method would also satisfy Mt. Clemens’ just and reasonable inference standard: The jury may simply "extrapolate from the substantial subset of overall dancer hours as to which the Court has already granted partial summary judgment,” specifically the "57,823 dancer-days where the Clubtrax records are complete and conclusive,” to derive the average hours worked on the dancer work-days for which the Club’s records are incomplete. Dkt. 719.
. See Hart,
. In so ruling, the Court recognizes that, in the event of a truly unexpected development, to assure fairness, there could be a need to recall a witness on the defense case. The Court does not categorically rule out this possibility. See Buchwald,
. See generally Fed.R.Evid. 408 (advisory committee note) ("As a matter of general agreement, evidence of an offer to compromise a claim is not receivable in evidence as an admission of, as the case may be, the validity or invalidity of the claim. As with evidence of subsequent remedial measures, dealt with in Rule 407, exclusion may be based on two grounds. (1) The evidence is irrelevant, since the offer may be motivated by a desire for peace rather than from any concession of weakness of position. The validity of this position will vary as the amount of the offer varies in relation to the size of the claim and may also be influenced by other circumstances. (2) A more consistently impressive ground is promotion of the public policy favoring the compromise and settlement of disputes. McCormick §§ 76, 251. While the rule is ordinarily phrased in terms of offers of compromise, it is apparent that a similar attitude must be taken with respect to completed compromises when offered against a party thereto. This latter situation will not, of course, ordinarily occur except when a party to the present litigation has compromised with a third person.... The same policy underlies the provision of Rule 68 of the Federal Rules of Civil Procedure that evidence of an unaccepted offer of judgment is not admissible except in a proceeding to determine costs.”).
. Defendants’ offer to Hart was:
Peregrine Enterprises, Inc., a defendant in this action, offers to allow judgment to be taken against it by the plaintiff for the sum of Thirty Thousand Dollars ($30,000.00), inclusive of all attorneys’ fees accrued to this date, plus costs, in full and final resolution of all claims asserted by Plaintiff in this action against all Defendants. This offer is made pursuant to Rule 68 of the Federal Rules of Civil Procedure, and evidence of this offer is not admissible except in a proceeding to determine costs. This offer is not to be construed either as an admission that the Defendants are liable in this action, or that the Plaintiff has suffered any damage. If this offer is not accepted in writing within ten (10) days after it is served, it will be deemed withdrawn.
Dkt. 680 (citing Dkt. 14) (emphasis added). Defendants' offer to Furedi was:
Peregrine Enterprises, Inc., a defendant in this action, offers to allow judgment to be taken against it by plaintiff Reka Furedi (“Furedi”) for the sum of Twenty One Thousand Dollars ($21,000.00), plus costs, including reasonable attorneys' fees incurred by Furedi, accrued to this date. This offer is made pursuant to Rule 68 of the Federal Rules of Civil Procedure, and evidence of this offer is not admissible except in a proceeding to determine costs. This offer is not to be construed either as an admission that the Defendants are liable in this action, or that the Plaintiff has suffered any damage. If this offer is not accepted in writing within ten (10) days after it is served, it will be deemed withdrawn.
Id. (emphasis added).