United States District Court, S.D. Mississippi, Northern Division
ORDER DENYING SUMMARY JUDGMENT
T. WINGATE UNITED STATES DISTRICT JUDGE.
the court is the Motion for Summary Judgment filed by the
Defendant, Danny's of Jackson LLC (hereafter
“Danny's of Jackson” or
“Defendant”). [doc no. 73]. The
Plaintiff United States Equal Employment Opportunity
Commission (hereafter “EEOC” or
“Plaintiff”) opposes the motion.
AND PROCEDURAL BACKGROUND
lawsuit is an enforcement action brought by the EEOC under
the auspices of Title VII of the Civil Rights Act of
1964, as amended, and the Civil Rights Act of
1991, to correct allegedly unlawful employment practices
based on race and seeking relief on behalf of five Black
female exotic dancers who allegedly were subjected to
disparate terms and conditions of employment based on their
race. The suit initially was brought against Danny's
Restaurant, LLC, as well as against Danny's of Jackson,
LLC (hereafter Danny's of Jackson). Danny's
Restaurant, LLC did not file an answer nor enter an
appearance in this cause. Resultantly, the United States
Clerk of Court for this Division entered default against this
defendant on August 24, 2017 [doc. no. 41].
of Jackson is the current owner of a strip club,
“Danny's Downtown Cabaret, ” located at 995
South West Street, in the downtown area of Jackson,
Mississippi. Danny's of Jackson is a limited liability
company formed in March of 2016, by Danny McGee Owens
(hereafter “Owens) and his son, Daniel Daxon Owens
(hereafter “Dax”), who were the only members.
Certificate of Formation [doc. no. 79-24]. At
present, Danny McGee Owens claims to be the sole member of
the limited liability company. According to Danny's of
Jackson, the previous owner of Danny's Downtown Cabaret
was “Baby O's Restaurant, Inc., ” (hereafter
Baby O's). Baby O's, says Danny's of Jackson,
owned the strip club in 2013, the period during which the
Title VII violations at issue here, allegedly occurred. Owens
was incarcerated during this time, having been sentenced to
federal prison in 1992 and released in 2016.
O's was incorporated in April, 1998, and its principal
office address was 995 S. West Street, Jackson, Mississippi,
the same address as the location of Danny's Downtown
Cabaret. The officers and directors of Baby O's included:
Owens' best friend, Dwight Easley, vice president;
Owens' girlfriend at that time, Lesli Stovall, president;
Owens' step father, James C. Cooper, incorporator, and
Owens' son, Dax, registered agent.
August 2, 2013, Ashley Williams, a dancer working at
Danny's Downtown Cabaret, lodged a charge of
discrimination with the EEOC [doc. no. 81-10]. Following the
requisite investigation, EEOC issued a Letter of
Determination on June 2, 2016 [doc. no. 81-13], finding
reasonable cause to believe that the Defendants had violated
Title VII. Efforts at conciliation failed and on July 29,
2016, the EEOC issued to Defendants a Notice of Failure of
Conciliation, and filed the instant lawsuit on September 30,
seeks, inter alia, injunctive relief, damages and
other affirmative relief to make the complainants whole, as
well as back pay for Ashely Williams, who alleges retaliation
and wrongful termination. Plaintiff also asks for punitive
damages for what it alleges to be malicious and reckless
judgment is appropriate if “the pleadings, depositions,
answers to interrogatories, and admissions on file, together
with the affidavits, if any, show that there is no genuine
issue as to any material fact and that the moving party is
entitled to judgment as a matter of law.” Fed.R.Civ.P.
56(a); Copeland v. Nunan, 250 F.3d 743
(5th Cir. 2001); see also Wyatt v. Hunt
Plywood Company, Inc., 297 F.3d 405, 408-09
(2002). When assessing whether a dispute as to any
material fact exists, all of the evidence in the record is
considered, but the court must refrain from making
credibility determinations or weighing the evidence.
Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S.
133, 150, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000); instead,
the court must “draw all reasonable inferences in favor
of the nonmoving party.” Id.; Wyatt,
297 F.3d at 409. All evidence and the reasonable inferences
to be drawn therefrom must be viewed in the light most
favorable to the party opposing the motion. United States
v. Diebold, Inc. 369 U.S. 654, 655 (1962).
party, however, cannot defeat summary judgment with
conclusory allegations, unsubstantiated assertions, or
“only a scintilla of evidence.” TIG Ins. Co.
v. Sedgwick James of Wash. 276 F.3d 754, 759
(5th Cir. 2002); S.E.C. v. Recile, 10
F.3d 1093, 1097 (5th Cir. 1997); Little v.
Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.1994).
Summary judgment is appropriate if a reasonable jury could
not return a verdict for the nonmoving party. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505,
91 L.Ed.2d 202 (1986).
Danny's of Jackson claims it is entitled to summary
judgment because it was not the owner/employer during the
period of the alleged violations.
support of its Motion for Summary Judgment, Danny's of
Jackson makes four arguments. First, says this Defendant, it
is not responsible for any discriminatory acts prior to the
date that Danny's of Jackson purchased the assets of the
strip club from Baby O's, on or about April 11, 2016.
Around the time Owens was about to be released from prison,
he formed the limited liability company, Danny's of
Jackson, with his son Dax. According to Owens, the company
then purchased the assets of Danny's Downtown Cabaret
from Baby O's, which had owned the club during Owens'
imprisonment. Attached to this Defendant's memorandum
brief is a bill of sale entered into between Danny's of
Jackson, LLC, as buyer, and Baby O's Restaurant, Inc., as
the seller, on April 11, 2016 [doc. no. 74-6].
Defendant, Danny's of Jackson, contends that, as
purchaser of the club's assets in 2016, it cannot be held
liable for acts committed under the ownership of Baby O's
that occurred three years earlier. Relying on well-settled
authority, EEOC argues that Danny's of Jackson, the new
owner of the strip club, is liable for the Title VII
infractions that occurred under the previous owner, Baby
O's, under the successor liability doctrine. Danny's
of Jackson does not cite a single case, statute, regulation
or legal authority of any kind to support its contentions to
successor liability doctrine is derived from labor law
principles. It was first applied to employment discrimination
cases in Equal Employment Opportunity Comm'n v.
MacMillan Bloedel Containers, Inc., 503 F.2d 1086, 1093
(6th Cir. 1974) (considerations that justify use
of the successor doctrine to remedy unfair labor practices
apply equally to unfair employment practices under the Civil
Rights Act of 1964). “[T]he purpose of the doctrine is
to ensure that an employee's statutory rights are not
“vitiated by the mere fact of a sudden change in the
employer's business.” The doctrine allows the
aggrieved employee to enforce against the successor a claim
he could have secured against the predecessor.”
Rojas v. TK Commc'ns, Inc., 87 F.3d 745, 750
(5th Cir. 1996) (quoting Brennan v. Nat'l Tel.
Directory Corp., 881 F.Supp. 986, 992 (E.D. Pa. 1995)).
supra, is the leading case on this issue from the United
States Court of Appeals for the Fifth Circuit. Rojas
delineates nine factors that the court should consider in
deciding whether successor liability applies to the
purchasing company. The first two factors are: (1) whether
the successor company had notice of the charge or pending
lawsuit before acquiring the assets of the predecessor; and
(2) the ability of the predecessor to provide relief. The
other seven factors help to establish whether there was a
“substantial continuity” of business operations
between the two entities. As more thoroughly discussed in the
court's Order and Opinion on EEOC's Motion for
Summary Judgment as to Successor Liability, this court is
persuaded that Danny's of Jackson is liable as the
successor in interest, for Title VII violations that
allegedly occurred during the period that Baby O's was
the owner of Danny's Downtown Cabaret.
primary argument made by Danny's of Jackson to avoid
successor liability is that Danny McGee Owens [hereafter
“Owens”], the sole member of Danny's of
Jackson LLC, was incarcerated during the time of the
violations alleged by the complainants here, and that Owens
did not participate in operating the business while in
prison. Owens was incarcerated for a federal felony
conviction from approximately 1992 to 2016. Defendant does
not explain how this argument assists the court's
evaluation of the successor liability issue ...