by Mark Smiley
In a series of class action lawsuits filed in various states, lawyers for exotic dancers claim nightclubs are taking financial advantage of the women regarding employment status. But after recent settlements, some of the putative plaintiff dancers feel that it is the lawyers who are exploiting them, banking millions of dollars while giving the dancers less than what they would make in a single night’s work.
The claims by the dancers are in line with plaintiffs in other class action cases in the United States in which the only substantial beneficiary of the lawsuits are the contingency lawyers themselves. Lawrence Schonbrun in the American Thinker called it “The Class Action Racket.”
He points to the plaintiffs’ lawyers in the Ford Explorer SUV class action cases where the lawyers banked $25 million in attorney fees while the plaintiffs received a $500 coupon toward the purchase of a new Ford vehicle with only 148 plaintiffs bothering to obtain a coupon. Thus all the class plaintiffs combined in that case actually received a total of $74,000 compared to the $25 million bonanza raked in by their attorneys.
In the Bank of Boston class action lawsuit the class members had as a result of the settlement their bank accounts credited with between $2.19 and $8.76 but then had their accounts debited up to $9.00 by the plaintiffs’ lawyers to cover the costs of the litigation. For this dubious benefit for their clients the plaintiffs’ lawyers collected $8.5 million.
Plaintiff lawyers in Nevada and Michigan brought lawsuits on behalf of exotic dancers claiming that the strip clubs were violating labor laws regarding classifying the dancers as independent contractors and not employees and not meeting federal minimum wage requirements.
According to the Las Vegas Sun after over a decade of litigation plaintiffs’ lawyers on behalf of a class action of 28,000 dancers and former dancers agreed to a settlement of $6.55 million regarding 64 nightclubs across the country operated by Déjà vu Consulting Inc. The Sun indicated only $935,000 was available to be divided up among dancers who opt for cash payments. Most were to receive only credits against rental and other fees charged by the clubs. The article did not disclose how much in costs of litigation will be taken out and how much the plaintiffs’ attorneys will receive. It is however estimated that the lawyers would take in millions in cash.
Similar class action lawsuits have been filed in Denver by Mari Newman of Killmer, Lane & Newman, LLP. That law firm is best known for losing the lawsuit on behalf of University of Colorado professor Ward Churchill against the University of Colorado for wrongful termination.
Newman has brought separate lawsuits against PT’s Showclub in Denver and Shotgun Willie’s in Glendale (which advertises in the Chronicle). The initial hurdle for any class action appears to be the fact that the exotic dancers agreed to take any controversy, dispute or claim to binding arbitration held pursuant to the Federal Arbitration Act.
Newman takes the position that the exotic dancers are too uneducated and lack the business savvy to understand a provision regarding binding arbitration pursuant to the Federal Arbitration Act.
Extraordinary Contingency Fee
The Chronicle has obtained a copy of a Retainer Agreement prepared by Killmer, Lane & Newman, LLP signed by an exotic dancer for a case against PT’s Showclub. While plaintiff’s attorneys normally limit themselves to one-third of what is recovered, Newman is apparently demanding 40 percent of the total recovery as well as all costs. Some experts indicate that in their opinion the strippers are the ones being fleeced by their own class action attorneys as has happened in some other class action lawsuits attorneys.
In the “Plaintiffs’ Motion to Defer Consideration and Briefing of. Or Deny, Defendants’ Motion to Compel Arbitration” filed in the lawsuit in federal court Mari Newman declared:
“They [strippers] generally lack formal education and are at the bottom of the socio-economic hierarchy. Defendants knew the Plaintiffs lacked the power, resources, and experience to negotiate fair treatment, and used this knowledge to exploit Plaintiffs . . . .”
Experts indicate that if Mari Newman and her firm believe this to be true, how would the dancers have any capacity to enter into a fair and equitable contingency fee agreement with their attorneys? In addition, how would they be able to knowledgably know whether to accept a proposed settlement agreement that doesn’t just enrich the class action plaintiff lawyers? The Motion would appear to be strong evidence against the attorneys should they ever be sued by the dancers for their actions relating to the lawsuit.
As a practical matter, it would appear the vast majority of the dancers at a nightclub like Shotgun Willie’s do have formal education, often into college and beyond and based on what they make at clubs like Shotgun Willie’s, they are far from the “bottom of the socio-economic hierarchy.”
Lawyers Held In Low Regard
At Shotgun Willie’s the opinion among at least some of the dancers of Ms. Newman and similar class action lawyers was relatively low. One dancer who goes by the stage name “Harper” stated for the record, “Honestly, from my perspective, I actually respect those lawyers a lot less than my fellow dancers, because I think they are making a less honest living than I am.”
Harper is a classical syphony harpist and has a master’s degree.
She also indicated that the somewhat paltry settlements for the dancers while vastly enriching the lawyers have become increasingly known. “The lawyers make all the money and those are the only people profiting.”
“Anytime the lawyers walk away with millions and all the entertainers for dozens of clubs split cash of less than a million, yeah, I’d say they [the class action attorneys] are bottom feeders,” said Michele Poague, the Manager of Human Resources at Shotgun Willie’s referring to other lawsuits.
“I think the attorneys are simply money hungry,” said Aumbree Whitmarsh, a former dancer who is now a manager at Shotgun Willie’s.
It appears that in various settlements in other states the dancers at the end do not become employees but retain their independent contractor status notwithstanding the fact that the original claims were that the same was illegal and exploitative.
The lawsuits filed in Colorado by Ms. Newman are expected to last for years if the prior lawsuits across the country are any indication.