Doe v. G.M. Holdings, Inc. et al

Filing 24

MEMORANDUM. Signed by Judge William M Nickerson on 3/3/2016. (jnls, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
JANE DOE

*
*
v.
* Civil Action No. WMN-14-2933
*
G.M. HOLDINGS, INC
*
*
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
MEMORANDUM
Plaintiff has been employed as an exotic dancer at a club
owned and operated by Defendant G.M. Holdings, Inc. (G.M.).
Plaintiff filed this action on September 16, 2014, against:
G.M.; 408, LLC, another limited liability corporation associated
with the club; and three individuals that had a financial
interest in G.M.

In her Complaint, Plaintiff alleged that,

while in G.M.’s employ, she “typically and customarily works
approximately fifty-five (55) hours per week,” Compl. ¶ 35, but
was paid no wages.

See id. ¶ 51 (alleging that, as a result of

Defendants’ “fee and fine system,” Plaintiff received “negative
wages”).

She brought this action under the Federal Fair Labor

Standards Act of 1938, as amended, 29 U.S.C. §§ 201 et seq.
(FLSA) and the Maryland Wage and Hour Law, Md. Code Ann., Lab. &
Empl. §§ 3-401 et seq. (MWHL).
The Court dismissed 408, LLC and the three individual
Defendants after Plaintiff failed to serve them in a timely
manner, despite being given several extensions of time in which

to do so.

ECF No. 16.

Plaintiff served G.M. on or about

September 20, 2014, but G.M. never filed an answer or otherwise
responded to the Complaint.

On January 29, 2015, the Clerk of

the Court entered default against G.M.

On or about April 10,

2015, Plaintiff filed a motion for default judgment against G.M.
ECF No. 10.

Because Plaintiff’s claim was not for a sum

certain, the Court scheduled a hearing for November 24, 2015, to
determine the amount of damages.

After Plaintiff’s counsel

informed the Court that he was unable to confirm Plaintiff’s
availability to appear on that date, the hearing was continued
to December 10, 2015.
On December 9, 2015, Plaintiff’s counsel submitted a
Memorandum in support of the entry of judgment to which was
attached an expert report detailing the amount of regular and
overtime wages that were being sought from G.M.

ECF No. 21,

Mem. with attached Aff. of Elana Schulman, CPA, CFE (Schulman
Report).

That Memorandum also requested that Plaintiff be

excused from presenting live testimony at the hearing.

In a

telephone conversation with chambers, Plaintiff’s counsel
indicated that he was having difficulty locating his client.
On December 10, 2015, this Court denied the motion for
default judgment, noting that the underlying data on which
Plaintiff’s expert based her opinion was inconsistent with the
allegations in the Complaint.

Specifically, while Plaintiff
2

alleged in her Complaint that she worked approximately 55 hours
per week, the data provided to the expert to compute her lost
wages reflected Plaintiff working 74 hours per week, every
single week for the three years prior to filing suit.

While

denying the motion, the Court gave Plaintiff’s counsel 30 days
in which to submit a sworn declaration from Plaintiff regarding
her best recollection of hours worked and pay received.
22.

ECF No.

Plaintiff submitted that declaration on January 8, 2016.

ECF No. 23.

In this new declaration, Plaintiff now represents

that, with a few exceptions for holidays and personal
commitments, she worked 82 hours per week.1
It is within the court's discretion to grant default
judgment when a defendant does not respond or defend its case.
See Park Corp. v. Lexington Ins. Co., 812 F.2d 894, 896 (4th
Cir. 1987).

Here, G.M. was served with the Complaint more than

a year ago and has failed to make any response.

Under Rule

8(b)(6) of the Federal Rules of Civil Procedure, any “allegation
– other than one relating to the amount of damages – is admitted
if a responsive pleading is required and the allegation is not
denied.”

Thus, for purposes of default judgment, it is

established that Plaintiff was an employee of G.M., as opposed
to an independent contractor, Compl. ¶ 37, that G.M. had
1

Plaintiff avers that she worked from noon till 8:00 p.m. every
Monday through Friday and then worked “a second shift from 8
p.m. through 2 a.m. each and every day of the week.” Id. ¶ 5.
3

knowledge of the hours she was working, id. ¶ 36, and that she
was not paid a minimum wage (in fact, was not paid any wage).
Id. ¶ 51.

Therefore, G.M.’s liability under the FLSA and MWHL

is established.

As this Court stated in a similar case brought

by another exotic dancer,
[t]he Plaintiffs, as employees, are entitled by law to
receive minimum wage under the FLSA and MWHL.
Pursuant to the FLSA, “an employer must pay an
employee an hourly wage no less than the federal
minimum wage[,]” and overtime pay for each hour worked
in excess of forty hours per week. “The MWHL
similarly requires that employers pay the applicable
minimum wage to their employees and, in [§§ 3–415 and
3–420 of the Labor and Employment Article], that they
pay an overtime wage of at least 1.5 times the usual
hourly wage” for each hour worked in excess of forty
hours per week.
McFeely v. Jackson Street Entertainment, LLC, 47 F. Supp. 3d
260, 276 (D. Md. 2014).
The Court must now determine the amount of damages to be
awarded.

Plaintiff has requested that the Court enter judgment

based on the evidence presented in Plaintiff’s Declaration and
the Schulman Report, without holding an evidentiary hearing.

On

a default judgment, a court may only award damages without a
hearing if the record supports the damages requested.
Portofino, 751 F. Supp. 2d 789 (D. Md. 2010).

Monge v.

As noted above,

Plaintiff did state, under oath, that she generally worked 84
hours a week and received no wages from her employer, G.M.

4

The Court, however, cannot award damages consistent with
Plaintiff’s Declaration because the hours Plaintiff now asserts
she worked greatly exceed the 55 hours per week that she alleged
she worked in the Complaint.
Under Rule 54(c) of the Federal Rules of Civil Procedure,
“[a] default judgment must not differ in kind from, or exceed in
amount, what is demanded in the pleadings.”

The rationale

behind this provision is that,
the defending party should be able to decide on the
basis of the relief requested in the original pleading
whether to expend the time, effort, and money
necessary to defend the action. It would be
fundamentally unfair to have the complaint lead
defendant to believe that only a certain type and
dimension of relief was being sought and then, should
defendant attempt to limit the scope and size of the
potential judgment by not appearing or otherwise
defaulting, allow the court to give a different type
of relief or a larger damage award.
10 Wright & Miller, Fed. Prac. & Proc. Civ. § 2663 (3d ed.
1998).

While the Court can employ the methodology used by

Plaintiff’s expert in computing her minimum wage and overtime
pay and can accept that Plaintiff worked at least 55 hours per
week, it’s damage computation must be limited to a 55 hour
workweek.
Using those hours and the federal minimum wage of $7.25 per
hour, Plaintiff is entitled to $45,240 in wages for regular

5

hours worked for the three years prior to her filing suit.2

For

the 15 hours per week of overtime pay, at one and one half times
the minimum wage, or $10.88, Plaintiff is entitled to $25,459.20
in overtime wages.

Based on Plaintiff’s unchallenged

representation that she was paid no wages, whatsoever, for this
period, Plaintiff would then be entitled to $70,699.20.

The

FLSA also provides for mandatory liquidated damages in an amount
equal to the unpaid minimum wage and unpaid overtime
compensation.

29 U.S.C. § 216(b).

Thus, Plaintiff is entitled

to an additional $70,699.20 under the FLSA liquidated damages
provision, for a total award of $141,398.40.3
The Court notes that, while the Complaint was brought under
the MWHL as well as the FLSA, Plaintiff’s expert calculated
damages solely relying on the FLSA.

Plaintiff, of course, is

2

While the statute of limitations for FLSA claims is normally
two years, where a defendant’s conduct is “willful,” the
plaintiff may recover for the preceding three years. 29 U.S.C.
§ 255(a). Here, Plaintiff has alleged that G.M. had “actual
knowledge that Plaintiff and other exotic dancers were in fact
employees and not independent contractors” and “engaged in a
widespread pattern, policy and practice of violating the FLSA.”
Compl. ¶¶ 80, 81. In lieu of G.M’s default, the Court accepts
these allegations as established and thus applies the three year
“willful” limitations period.
3

Plaintiff’s expert calculated “[l]iquidated damages under the
FLSA” “by multiplying the loss by ‘2’ (adding a like amount
assuming the availability of liquidated damages).” Schulman
Report at 3. The expert then seems to suggest that this amount
should be added to the amount of actual damages, which would
result in a damage award that is three times the actual damages.
Id. at 7. That is inconsistent with the provisions of the FLSA.
6

not entitled to additional damages under the state statute in
that, under the “one wrong, one recovery rule” a party may not
recover twice for one injury, even if the party asserts
multiple, consistent theories of recovery.

See Gen. Tel. Co. of

the Northwest, Inc. v. EEOC, 446 U.S. 318, 333 (1980) (“It ...
goes without saying that the courts can and should preclude
double recovery by an individual.”).

While it is true that,

there is a potential for treble damages under the MWHL, treble
damages are only awarded upon a showing of consequential
damages.

Monge v. Portofino Ristorante, 751 F. Supp. 2d 789,

799-800 (D. Md. 2010).

Here, Plaintiff did not allege

consequential damages in her Complaint.
The Court will enter judgment in favor of Plaintiff and
against Defendant G.M. in the amount of $141,398.40.

A separate

order will issue.

____________/s/___________________
William M. Nickerson
Senior United States District Judge

DATED: March 3, 2016 

7