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Henderson v. Vcg Holdings Corp.

United States District Court, Eighth Circuit

May 3, 2013

Samantha Henderson, Britney Wessels, and Brandi Bennett, Plaintiffs,
VCG Holdings Corp., Classic Affairs, Inc., and International Entertainment Consultants, Inc., Defendants.

William L. Tilton, Esq., and George R. Dunn, Esq., Tilton & Dunn PLLP, Saint Paul, MN, on behalf of Plaintiffs.

Gina K. Janeiro, Esq., David J. Duddleston, Esq., and Nora R. Kaitfors, Esq., Jackson Lewis LLP, Minneapolis, MN, on behalf of Defendants.


ANN D. MONTGOMERY, District Judge.


This matter is before the undersigned United States District Judge for a ruling on Defendants VCG Holdings Corp. ("VCG"), Classic Affairs, Inc. d/b/a Schieks Palace Royale ("Schieks"), and International Entertainment Consultants, Inc.'s ("IEC") (collectively referred to as "Defendants") Objections to Magistrate Judge Franklin Noel's Order of March 7, 2013 ("March 7 Order") [Docket No. 64] and of March 28, 2013 ("March 28 Order") [Docket No. 71]. The Defendants object the March 7 Order, which denies Defendants' motion to strike paragraphs from Plaintiffs' Second Amended Complaint and grants in part Plaintiffs' motion to compel discovery. Defs.' Mem. Supp. Objections to March 7 Order ("Defs.' Mem. re March 7") [Docket No. 69]. The Defendants also object to the March 28 Order, which grants in part Plaintiffs' motion to compel electronically stored information. Defs.' Mem. Supp. Objections to March 28 Order ("Defs.' Mem. re March 28") [Docket No. 75]. Defendants' Objections are overruled and Judge Noel's Orders are affirmed.


Plaintiffs Samantha Henderson, Britney Wessels, and Brandi Bennett were employed as waitresses at Defendants' nightclub, Schieks. Sec. Am. Compl. §§ 8-10 [Docket No. 65]. Defendant VCG, by and through its subsidiaries, owns approximately twenty adult nightclubs around the country. Id . § 2. Defendant Classic Affairs was a wholly-owned subsidiary of VCG from approximately April 2007 through July 2011 and during that time was a Minnesota corporation d/b/a Schieks. Id . § 4. Defendant IEC is an operator, manager, investor, and developer of night clubs, including Schieks. Id . § 5. Julian Royal acted as Manager of Schieks and Area Director for Defendants from about June 2007 until March 2009. Id . § 23.

Plaintiffs allege sexual discrimination and harassment under both the Minnesota Human Rights Act and Title VII. The Second Amended Complaint alleges: "During their employment by defendants, plaintiffs' supervisor, Julian Royal, subjected them to sexual harassment, including but not limited to comments of a sexual nature, sexual advances, sexual overtures, and sexual references and innuendo, sexual touching, and sexual assault." Id . § 177. Plaintiffs also allege assault and battery, intentional infliction of emotional distress, false imprisonment of Plaintiffs Samantha Henderson and Britney Wessels, and age discrimination against Plaintiff Brandi Bennett. Id . §§ 203-231.


The standard of review for an objection to a magistrate judge's order on a nondispositive issue is extremely deferential. See Reko v. Creative Promotions, Inc. , 70 F.Supp.2d 1005, 1007 (D. Minn. 1999). The magistrate judge's order on a discovery issue will be affirmed by the district court unless the decision is "clearly erroneous or contrary to law." Fed.R.Civ.P. 72(a). A decision is "clearly erroneous" when "the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." Chakales v. Commissioner , 79 F.3d 726, 728 (8th Cir. 1996) (quoting United States v. U.S. Gypsum Co. , 333 U.S. 364, 395 (1948)). A decision is contrary to law when it misapplies or fails to apply the relevant case law, statutes, or rules of procedure. Knutson v. Blue Cross & Blue Shield of Minn. , 254 F.R.D. 553, 556 (D. Minn. 2008).

A. Denial of Defendants' Motion to Strike

Defendants object to the March 7 Order's denial of their motion to strike. March 7 Order § 2. First, Defendants argue it was error to deny Defendants' motion to strike allegations with respect to a theory of retaliation. Plaintiffs' retaliation allegations are proper and relevant to their case as a part of their Minnesota Human Rights Act ("MHRA") discrimination count. The parties agreed to eliminate the separate common law Retaliation Count because it is inherently included within the MHRA; therefore, the allegations themselves remain relevant. Second, allegations regarding Royal's severance package have relevance to Plaintiffs' disparate treatment claims. Third, allegations relating to Defendants' "misuse of the corporate form" could be relevant to Plaintiffs' efforts to pierce the corporate veil. Finally, allegations related to Defendants' dealings with the City of Minneapolis and the liquor licensing process could be relevant to what Defendants knew of Royal's conduct. Therefore, Judge Noel properly found that the paragraphs Defendants moved to strike in the Second Amended Complaint were not impertinent, immaterial, redundant, or scandalous. Judge Noel's denial of this motion was not clearly erroneous or contrary to law.

B. Grant in Part of Plaintiffs' Motion to Compel

Defendants object to the March 7 Order's grant of Plaintiffs' motion to compel the disclosure of names, addresses, and telephone numbers of "[a]ll persons named in Classic-Henderson documents 1350 and 1542." Id . § 3(a)(x). Defendants also object to Judge Noel's grant of Plaintiffs' motion to compel production of an unredacted copy of Classic-Henderson documents 1350-1542 and of sworn statements of certain individuals. Id . §§ 3(c), (i). Defendants assert that the names contained in the Classic-Henderson documents are non-party employees, having no relationship to the case at hand. Defendants also argue that the scope of the request "for all ' sworn statements from, among others, all ' potential witnesses" is "facially absurd." Defs.' Mem. re March 7, at 13. At its core, Plaintiffs seek information related to Royal's employment with VCG and its subsidiaries. The names recorded in the Classic-Henderson documents appear to be employees of VCG subsidiaries and worked under Julian Royal's supervision. Their statements could contain ...

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