Santich v. VCG Holding Corp. et al

Filing 139

ORDER denying 132 Plaintiffs Corrected Motion For Leave to File Surreply to Defendants Reply in Support of Motion to Stay Discovery or Dismiss and Motion for Court Facilitated Discovery Conference by Magistrate Judge Michael E. Hegarty on 08/10/2017. The Motion Hearing currently set for 8/14/2017 is VACATED. (mdave, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 17-cv-00631-RM-MEH
GEORGINA SANTICH,
JANEL ANDERSON,
JESSICA SAULTERS ARCHULETTA,
ADRIANNE AXELSON,
EMILY BACHELDER,
ALENA BAILEY,
RACHEL BERRY,
NICOLE BUJOK,
BRANDI CAMPBELL,
TALITA CATTO,
MELISSA CHAVEZ,
ARIEL CLINE,
MEGAN FITZGERALD,
AMANDA GABRIEL,
AMY GLINES,
JOHANNA GRISSOM,
AMANDA LIVINGSTON,
ARIELLE MANSFIELD,
CHADA MANTOOTH,
KARLA MARTINEZ,
CHRISTINA MASSARO,
ALEXIS NAGLE,
LAPORTIA OAKLEY,
GALE RAFFAELE,
AMRICA TERRELL,
PENNY WATKINS,
CASANDRA WINDECKER,
MELANIE TRACY,
PORSCHA GREEN,
AMANDA SHAFER,
ASHLEY WOZNEAK,
REBECCA RAIL,
ANDREA ABBOTT, and
KIMBERY HALE, all individually and on behalf of all others similarly situated,
Plaintiffs,
v.
VCG HOLDING CORP.,
LOWRIE MANAGEMENT, LLLP,

TROY LOWRIE,
MICHAEL OCELLO,
DENVER RESTAURANT CONCEPTS LP d/b/a PTs Showclub,
KENKEV II, INC. d/b/a PTs Showclub Portland,
INDY RESTAURANT CONCEPTS, INC. d/b/a PTs Showclub Indy,
GLENARM RESTAURANT, LLC d/b/a Diamond Cabaret,
GLENDALE RESTAURANT CONCEPTS, LP d/b/a The Penthouse Club,
STOUT RESTAURANT CONCEPTS, INC. d/b/a La Boheme, and
VCG RESTAURANTS DENVER, INC. d/b/a PT’s All Nude,
Defendants.
______________________________________________________________________________
ORDER
______________________________________________________________________________
Michael E. Hegarty, United States Magistrate Judge.
Plaintiffs seek permission to file a surreply to Defendants’ Reply in Support of its Motion
to Dismiss and Compel Arbitration. ECF No. 132. Additionally, Plaintiffs argue they need
additional discovery to properly respond to Defendants’ reply. Because Defendants’ reply makes
arguments and presents evidence that directly rebuts the arguments Plaintiffs assert in their response,
the Court denies Plaintiffs’ motion.
BACKGROUND
Plaintiffs—thirty-four adult dancers—initiated this collective action on March 10, 2017.
Compl., ECF No. 1. In an Amended Complaint, Plaintiffs assert that Defendants improperly treated
them as independent contractors in violation of the Fair Labor Standards Act and various state wage
acts. Am. Compl. ¶¶ 125–94, ECF No. 65. Defendants responded to the Amended Complaint by
filing a Motion to Dismiss and Compel Arbitration, ECF No. 74. According to Defendants, each
Plaintiff signed binding arbitration agreements containing collective action waivers. Id. at 2.
On May 2, 2017, Plaintiffs filed a Motion to Defer Consideration on Defendants’ Motion to

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Compel, ECF No. 46. Plaintiffs asserted they needed additional discovery before being able to
respond to Defendants’ motion. Id. at 8. At a Discovery Conference on May 4, 2017, the Court
granted in part and denied in part Plaintiffs’ motion. Courtroom Minutes, ECF No. 53. Specifically,
the Court ordered that Plaintiffs must file a response to Defendants’ motion to compel arbitration
without the requested discovery. However, the Court permitted Plaintiffs to file a surreply if they
learned relevant information from Defendants’ discovery responses.
Plaintiffs filed their response on June 19, 2017. ECF No. 105. Plaintiffs assert that the
Court, not an arbitrator, should determine whether this case is arbitrable. Id. at 7–8. Additionally,
Plaintiffs contend the agreements between the parties are unenforceable due to procedural and
substantive unconscionability. Id. at 8–19. Plaintiffs submitted affidavits in support of their
procedural unconscionability argument. Id. at 9–14. These affidavits allege, inter alia, managers
rushed Plaintiffs through the agreements, Defendants presented the agreements as “take it or leave
it,” and Plaintiffs were forced to sign the agreements after they had been drinking and while they
were working. Id. at 9–11. Plaintiffs contend the agreements are substantively unconscionably,
because they require Plaintiffs to split fees and costs with Defendants. Id. at 14–19. Plaintiffs also
assert the arbitration clause’s class action waiver is illegal under the NLRA and FLSA and that the
non-signatory Defendants cannot enforce the arbitration provision. Id. at 4–6, 24–28.
Defendants filed a reply brief on July 10, 2017. ECF No. 120. Defendants argue that the
arbitrator must decide whether this case is arbitrable, because Plaintiffs’ challenges relate to the
agreements as a whole. Id. at 2–4. Additionally, Defendants rebut Plaintiffs’ argument that the
agreements are unconscionable by attaching affidavits of current and former employees. Id. at
12–18.

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On July 21, 2017, Plaintiffs filed the present Motion for Leave to File Surreply. ECF No.
132. According to Plaintiffs, the Court should permit them to submit a surreply, because they have
not previously seen the affidavits or videos Defendants attached to the reply brief. Id. at 4.
Additionally, Plaintiffs argue they need additional discovery before they can file a surreply. Id. at
4–6. Specifically, they request depositions of a sample of Defendants’ declarants and video
recordings for every Plaintiff who has signed a contract within the last three years. Id. Plaintiffs
also seek all contracts that show the dancers had an ability to negotiate terms. Id. at 5. Defendants
respond that the evidence attached to their reply rebuts arguments Plaintiffs made in their response.
Resp. to Mot. for Surreply 2–3, ECF No. 133.
ANALYSIS
“[W]hen a moving party advances in a reply new reasons and evidence in support of its
motion,” courts can either grant the nonmoving party an opportunity to respond or decline to rely
on the new material when deciding the motion. Beaird v. Seagate Tech., Inc., 145 F.3d 1159,
1164–65 (10th Cir. 1998). However, a surreply is improper when arguments made in a reply brief
respond directly to arguments the opposing party asserted in its response brief. Altamirano v. Chem.
Safety & Hazard Investigation Bd., 41 F. Supp. 3d 982, 993–94 (D. Colo. 2014).
Here, the Court denies Plaintiffs’ request for a surreply, because Defendants’ arguments and
evidence respond directly to the arguments Plaintiffs make in their response. First, the Court notes
that Plaintiffs do not seek a surreply to incorporate information learned through their recent
discovery requests. Therefore, although the Court contemplated a surreply during the May 4, 2017
Discovery Conference, Plaintiffs do not seek a surreply for the reasons discussed at the hearing.
Additionally, each of Defendants’ argument sections in their reply brief specifically rebuts

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arguments Plaintiffs made in their response. Defendants’ contention that the arbitrator must decide
arbitrability was first addressed by Plaintiffs on pages seven and eight of the response. Defendants’
assertion that most Plaintiffs have not challenged the making of the agreements responds to the
affidavits Plaintiffs attached to their response. Defendants’ contention that the arbitration clause is
not unconscionable rebuts Plaintiffs’ argument that it is. Similarly, Plaintiffs first discussed who
can enforce the arbitration clause and the illegality of the class action waiver.
Furthermore, that Defendants submitted new evidence to rebut Plaintiffs’ affidavits does not
entitle Plaintiffs to a surreply. “[W]here the reply affidavit merely responds to matters placed in
issue by the opposition brief and does not spring upon the opposing party new reasons for [granting
the motion], reply papers—both briefs and affidavits—may properly address those issues.”
Altamirano, 41 F. Supp. 3d at 993 (quoting Beck v. Univ. of Wis. Bd. of Regents, 75 F.3d 1130, 1134
n.1 (7th Cir. 1996)). Indeed, permitting a surreply to respond to rebuttal evidence would create
endless briefing where each party would get another opportunity to respond to the opposing party’s
recently submitted evidence.
Plaintiffs cite Doebele v. Sprint/United Management Co., 342 F.3d 1117 (10th Cir. 2003)
to support their argument. Mot. for Surreply 4. There, the Tenth Circuit recognized that a party
opposing a motion has the right to respond to new materials attached only to a reply brief. Doebele,
342 F.3d at 1139 n.3. However, the new material in that case supported the defendant’s pretext
argument, which the defendant made in its motion. Id. Here, the affidavits do not support
arguments Defendants made in their motion; instead, they rebut arguments Plaintiffs made in their
response brief. For example, Defendants do not argue in their motion that the arbitration clause is
not unconscionable. Plaintiffs raise this argument for the first time in their response brief.

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Accordingly, the Tenth Circuit’s concern that an opposing party would not have an opportunity to
respond to material submitted in support of the moving party’s arguments does not apply here.
Plaintiffs had an opportunity to respond to each of Defendants’ affirmative arguments when they
filed their response brief.
CONCLUSION
In sum, Plaintiffs are not entitled to a surreply, because Defendants’ reply brief and attached
exhibits directly rebut arguments Plaintiffs made in their response. Accordingly, Plaintiffs’
Corrected Motion For Leave to File Surreply to Defendants’ Reply in Support of Motion to Stay
Discovery or Dismiss and Motion for Court Facilitated Discovery Conference [filed July 21, 2017;
ECF No. 132] is denied. The Motion Hearing currently scheduled for August 14, 2017 is vacated.
Entered and dated at Denver, Colorado, this 10th day of August, 2017.
BY THE COURT:

_________________________
Michael E. Hegarty
United States Magistrate Judge

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