Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-4_18-cv-00490/USCOURTS-azd-4_18-cv-00490-0/pdf.json

Nature of Suit Code: 710
Nature of Suit: Fair Labor Standards Act
Cause of Action: 28:1331 Fed. Question: Fair Labor Standards

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Crystal Smith,

Plaintiff,

v. 

November Bar N Grill LLC, et al.,

Defendants.

No. CV-18-00490-TUC-RM (MSA)

REPORT AND 

RECOMMENDATION

This matter is on referral pursuant to Rules 72.1 and 72.2 of the Local Rules of Civil 

Procedure. Pending before the Court are the parties’ motions for summary judgment. 

(Docs. 82, 84.) For the following reasons, the Court will recommend that summary 

judgment be granted in favor of Defendants November Bar N Grill LLC (“November 

Bar”), Rosalinda Largent, and Mary Sagaya on Plaintiff Crystal Smith’s federal-law 

claims, and that supplemental jurisdiction be declined over Plaintiff’s state-law claims.

Background1

November Bar is owned by Rosalinda Largent and operated by Mary Sagaya. (Doc. 

90, ¶ 2.) It is licensed to provide adult entertainment. (Id. ¶ 1.) The parties dispute the 

volume of business done by November Bar: Defendants assert that November Bar’s annual 

gross revenue is regularly less than $40,000 and that the bar closes early on most nights 

due to a lack of customers. (Doc. 88 at 7, ¶¶ 52, 54, 56.) Plaintiff Crystal Smith asserts 

 

1 The following facts are undisputed unless otherwise noted. Citations to the record 

refer to the page numbers electronically generated by the Court’s filing system, not to the 

original page numbers in the documents cited.

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that Defendants’ evidence of November Bar’s revenue is inaccurate because November 

Bar is a cash-only business, and Defendants did not track the fees paid to them by 

individual dancers. (Doc. 91, ¶¶ 1, 3, 8.)

Plaintiff performed as an exotic dancer at November Bar starting in April 2016. 

(Doc. 90, ¶¶ 1, 8.) The parties dispute how often Plaintiff worked: Plaintiff asserts she 

worked six days per week for nearly two-and-a-half years, while Defendants assert she

worked only sporadically and would disappear for months at a time. (Doc. 88 at 10, ¶¶ 

89–90; Doc. 90, ¶¶ 16–17.) The parties’ arrangement ended in August 2018, when Plaintiff 

was told to leave the bar. (Doc. 90, ¶ 11.)

While working at November Bar, Plaintiff solicited customers to pay for her dancing 

performances. (Id. ¶ 10.) The songs Plaintiff danced to at November Bar came from a 

jukebox. (Id. ¶ 18.) The parties dispute whether the jukebox uses the internet to play 

music: Plaintiff asserts that the jukebox is “internet-streaming,” while Defendants assert 

that it is not. (Doc. 83, ¶ 32; Doc. 88 at 5, ¶ 32.) The parties also dispute whether 

Defendants imposed rules on their dancers: Defendants assert they have no rules for 

dancers other than that dancers follow the law. (Doc. 88 at 9, ¶ 81.) Plaintiff asserts that 

dancers are required to pay house fees, work four- to five-hour shifts at least three days per 

week, pay late fees for tardiness, and perform dances only in specific locations of the bar. 

(Doc. 83, ¶¶ 1, 5–6, 8, 11.)

Legal Standard

Summary judgment is proper “if the movant shows that there is no genuine dispute 

as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. 

Civ. P. 56(a). A fact is material if it “might affect the outcome of the suit under the 

governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A factual 

dispute is genuine if the evidence is such that a reasonable trier of fact could resolve the 

dispute in favor of the nonmoving party. Id. In evaluating a motion for summary judgment, 

the court must “draw all reasonable inferences from the evidence” in favor of the 

nonmovant. O’Connor v. Boeing N. Am., Inc., 311 F.3d 1139, 1150 (9th Cir. 2002). A 

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reasonable inference is one which is supported by “significant probative evidence” rather 

than “threadbare conclusory statements.” Barnes v. Arden Mayfair, Inc., 759 F.2d 676, 

680–81 (9th Cir. 1985). If “the evidence yields conflicting inferences [regarding material 

facts], summary judgment is improper, and the action must proceed to trial.” O’Connor, 

311 F.3d at 1150.

The party moving for summary judgment bears the initial burden of identifying 

those portions of the record, together with affidavits, if any, that it believes demonstrate 

the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 

(1986). If the movant meets this burden, the burden shifts to the nonmovant to “come 

forward with specific facts showing that there is a genuine issue for trial.” Matsushita 

Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (emphasis omitted); see 

also Fed. R. Civ. P. 56(c)(1).

Discussion2

Plaintiff has alleged four claims against Defendants. In count one and count two, 

she claims that Defendants violated the Fair Labor Standards Act (“FLSA”) by not paying 

overtime wages and minimum wage. 29 U.S.C. §§ 206(a), 207(a). In count three, she 

claims that Defendants violated the Arizona Minimum Wage Act (“AMWA”) by not 

paying minimum wage. Ariz. Rev. Stat. § 23-363(A). In count four, she claims that 

Defendants violated the Arizona Wage Act (“AWA”) by not timely paying all wages due. 

Id. § 23-351(C).

I. Fair Labor Standards Act

To establish a minimum-wage or overtime violation of the FLSA, Plaintiff must 

establish three elements: (1) she was an employee of Defendants, (2) she was covered under 

the FLSA, and (3) Defendants failed to pay her minimum wage or overtime wages. 29 

U.S.C. §§ 206(a), 207(a).3 There are two types of coverage under the FLSA: individual 

 

2 The parties’ motions raise identical issues and arguments. The Court has considered 

the issues from the perspective of Defendants’ motion—i.e., Defendants are the moving 

parties, and Plaintiff is the nonmoving party—so that Plaintiff is given the benefit of all 

reasonable inferences. The Court has considered all arguments and materials presented in 

connection with both motions.

3 Section 206(a) requires that employers pay their employees a minimum wage; § 

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and enterprise. Chao v. A-One Med. Servs., Inc., 346 F.3d 908, 914 (9th Cir. 2003). 

Defendants contend they are entitled to summary judgment because Plaintiff is unable to

establish either type of coverage. The Court agrees.

A. Individual Coverage

An employee has individual coverage if, during her work, she “is engaged in 

commerce.” 29 U.S.C. § 206(a).4 The FLSA defines “commerce” to mean “trade, 

commerce, transportation, transmission, or communication among the several States or 

between any State and any place outside thereof.” Id. § 203(b). In determining whether 

an employee is engaged in commerce, the court must “focus on the activities of the 

employee[] and not on the business of the employer.” Mitchell v. Lublin, McGaughy & 

Assocs., 358 U.S. 207, 211 (1959) (citations omitted). This fact-dependent inquiry is 

“guided by practical considerations, not technical conceptions.” Mateo v. Auto Rental Co., 

240 F.2d 831, 833 (9th Cir. 1957) (citing Mitchell v. C.W. Vollmer & Co., 349 U.S. 427, 

429 (1955)). 

Defendants argue that interstate commerce is in no way implicated by Plaintiff’s 

work as an exotic dancer. They acknowledge that Plaintiff has asserted she was required 

to dance to streaming music to perform her work, but they contend this assertion is without 

factual support. They contend further that although their jukebox is capable of 

downloading music, there is no evidence that Plaintiff ever downloaded a song or that she 

was required to do so for her work. By “pointing out through argument the absence of 

evidence to support plaintiff’s claim,” Defendants have met their initial burden to “show 

that the nonmoving party does not have enough evidence of an essential element to carry 

its ultimate burden of persuasion at trial.” Fairbank v. Wunderman Cato Johnson, 212 

F.3d 528, 532 (9th Cir. 2000); Nissan Fire & Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 

1102 (9th Cir. 2000). Therefore, the burden is Plaintiff’s “to produce enough evidence to 

 

207(a) requires that employers pay their employees an overtime wage. Because this is the 

only distinction between the elements created by each statute, subsequent citations will be 

only to § 206.

4 An employee also has individual coverage if she “engaged . . . in the production of 

goods for commerce.” 29 U.S.C. § 206(a). Plaintiff does not contend that she produced 

goods for commerce.

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create a genuine issue of material fact.” Nissan Fire, 210 F.3d at 1103.

Plaintiff responds that summary judgment is inappropriate because there is evidence

she engaged in commerce by regularly using Defendants’ internet jukebox. She analogizes 

this case to Foster v. Gold & Silver Private Club, Inc., No. 7:14CV00698, 2015 WL 

8489998, at *6 (W.D. Va. Dec. 9, 2015), a case in which dancers were found to have 

engaged in commerce by dancing to music streamed over the internet. She asserts that, 

like the Foster dancers, she was required to use an “internet-streaming jukebox” to dance 

and, as a result, she engaged in interstate commerce.

As is clear from Plaintiff’s argument, the sole link between Plaintiff and interstate 

commerce is the jukebox, its internet capabilities, and Plaintiff’s use of those capabilities. 

Thus, the first question to consider is: What are the jukebox’s capabilities? The jukebox 

manuals, which Plaintiff obtained directly from the vendor, Eagle Vending, are the most 

logical starting point. (See Doc. 83, ¶ 34.) As an initial matter, the jukebox can connect 

to the internet. (Doc. 83-3 at 13; Doc. 83-4 at 39.) Regarding music, the manuals 

differentiate between music stored locally on the jukebox hard drive and music that is not. 

(See Doc. 83-3 at 35; Doc. 83-4 at 39.) Music that is not already on the jukebox’s hard 

drive can be downloaded using the internet.5 (See Doc. 83-4 at 39 (“The Internet 

connectivity gives patrons more features, such as the ability to download ‘Music On 

Demand’ songs when their song choice is not already on the jukebox.”).) There is no 

indication that the jukebox uses the internet to stream music.6

Plaintiff argues that the “jukebox vendor, Eagle Vending, confirmed that the 

jukebox uses the internet to play songs.” However, Plaintiff does not support this statement 

with citation to the record. See Fed. R. Civ. P. 56(c)(1)(A) (requiring on summary 

judgment that parties support their assertions by “citing to particular parts of materials in 

the record”). The record shows only that Eagle Vending produced the jukebox manuals in 

 

5

“Downloading” refers to the “transfer (as data or files) from a usu. large computer 

to the memory of another device (as a smaller computer).” Download, Merriam-Webster’s 

Collegiate Dictionary (11th ed. 2003).

6

“Streaming” refers to the “transfer of data (as audio or visual material) in a 

continuous stream esp. for immediate processing or playback.” Streaming, MerriamWebster’s Collegiate Dictionary (11th ed. 2003).

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response to Plaintiff’s subpoena. (Doc. 83-3 at 2–6 (Plaintiff’s subpoena and a statement

from an employee of Eagle Vending verifying the authenticity and accuracy of the 

manuals).) There is nothing indicating that Eagle Vending itself confirmed that the 

jukebox plays songs only if connected to the internet. To the contrary, the manuals show

the jukebox does not require an internet connection to play music. (See id. at 35 (“Even 

though the jukebox is not connected to the AMI Entertainmentnetwork [sic], local music 

can still be selected and played.”).)

Next, Plaintiff cites to a range of pages in one of the manuals and broadly asserts 

that the pages contain information “about the internet connectivity of the jukebox.” (Doc. 

83, ¶ 35.) However, these pages merely describe how to install the jukebox wiring and 

internet router; there is no information about what the jukebox can do using the internet. 

(See Doc. 83-3 at 14–31.) Plaintiff also quotes the following sentence from one of the 

manuals: “In order to bring the AMI EntertainmentTM Network and the Internet to each 

location, a broadband connection must be installed at each site.” (Id. at 13.) This statement 

likewise says nothing about what the jukebox can do using the internet. Plaintiff also

asserts that the jukebox displays the words “online download,” and that Defendants’ 

website states, “You can be the DJ. With our Internet Jukebox there are thousands of song 

selections.” (Doc. 83-1 at 33; Doc. 83-2 at 6.) Plaintiff’s observation that music can be 

downloaded onto the jukebox is consistent with the jukebox manuals. Defendants’ website 

statements, however, say nothing about the jukebox’s internet capabilities.

Next, Plaintiff has made at least two sworn assertions that the jukebox is capable of 

streaming music over the internet. (Doc. 37, ¶ 44 (stating, in the verified complaint, that 

“[t]he jukebox used an internet subscription for music-streaming”); Doc. 83-1 at 33 

(stating, in an affidavit, that she “was required to use an internet-streaming jukebox to 

dance for patrons”).) These assertions have not been considered in determining whether 

summary judgment is appropriate. During oral argument, Plaintiff’s counsel conceded that 

the jukebox does not stream music. Moreover, an affidavit may be considered only if, 

among other things, it is “made on personal knowledge.” Fed. R. Civ. P. 56(c)(4). Plaintiff 

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clearly does not have personal knowledge that the jukebox streams music, since her own 

objective evidence (i.e., the manuals obtained from the vendor) shows it does not, and she 

indicated during her deposition that beyond knowing generally that the jukebox is “all 

internet, based off the internet,” she does not specifically know how it works. (Doc. 88 at 

18.) Additionally, Plaintiff’s assertions are not supported with specific facts showing how 

she learned that the jukebox streams music over the internet. See Intermountain Fair Hous. 

Council v. Boise Rescue Mission Ministries, 657 F.3d 988, 997–98 (9th Cir. 2011) 

(rejecting a declaration as outside the declarant’s personal knowledge, where the declarant 

failed to explain how she learned the alleged facts stated in the declaration).

Having determined what the jukebox can do (i.e., play music stored locally on its 

hard drive and download music using the internet), the next question to consider is: How 

did Plaintiff use the jukebox? In her affidavit, she asserts that she was required to use the 

jukebox to dance for patrons, and that she used her own money to play jukebox songs. 

(Doc. 83-1 at 33.) These are admissible facts that must be considered. However, in her 

motion briefing, Plaintiff adds that she “was required to download music from the internet 

to perform dances.” Plaintiff fails to support this statement with citation to evidence. See 

Fed. R. Civ. P. 56(c)(1)(A). Consequently, it has not been considered.

Additionally, although Plaintiff is entitled to the benefit of all reasonable inferences, 

it would not be reasonable to infer that Plaintiff was required to download music. 

Plaintiff’s evidence indicates she did not know how to download music, and that new music 

appeared only after the jukebox was serviced by an employee of the jukebox vendor. In 

her affidavit, she asserts that new music was “frequently uploaded” to the jukebox by a 

jukebox technician. (Doc. 83-1 at 33.) This is consistent with her deposition testimony:

Q: You state here that the jukebox would download songs from the 

internet. How do you know?

A: They would come in and service it, and new music was always up 

loaded [sic] to it, always, like – and it said internet. It says online, it says 

it right on the screen, as you’re picking out songs.

Q: It says what?

A: Online download. You can like push an option to download music from 

the WiFi, like from the internet.

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Q: So certain songs you have to download?

A: No, it just says it like on the screen. You can’t download it yourself, 

you have to, I guess – I don’t know how the jukebox works, but it’s all 

internet, based off the internet.

Q: You just said you don’t know how it works?

A: Well, I’m saying like I don’t know if they come in, because I know they 

came in and programmed it, whatever they did to it, they’d come in once a 

month, do whatever to it, and then there would be more music on there. 

And then on the top of the screen, it would say, to download more music 

from internet [sic], whatever, it would go across the screen, so it was online.

Q: You don’t know that the music was being downloaded from the 

internet?

A: No, it says online download on the screen.

Q: But what you’re saying is you would see somebody come in and service 

the jukebox about once a month?

A: Uh-huh.

Q: And that you would notice that there would be more music on the 

jukebox after they came and did that?

A: Yeah. It always says online at the top of the screen on the jukebox.

(Doc. 88 at 18.)

Despite Plaintiff working at November Bar for nearly two-and-a-half years, she not 

only lacked knowledge about how to download music, she believed that only a jukebox 

technician could download music. As such, it would not be reasonable to infer that 

downloading music was a job requirement. See Barnes, 759 F.2d at 680–81 (explaining 

that the nonmoving party “is entitled to the benefit of only reasonable inferences that may 

be drawn from the evidence” and that an inference is reasonable only if supported by 

“significant probative evidence” (emphasis in original) (citation omitted)).

Nor would it be reasonable to infer that Plaintiff in fact ever downloaded music. 

During oral argument, Plaintiff’s counsel suggested this would be a reasonable inference 

based on testimony that Plaintiff paid for new songs that cost two credits and other evidence 

that two-credit songs had to be downloaded. However, although Plaintiff was aware of a 

distinction between one- and two-credit songs, she has pointed to no testimony that the 

distinction was between locally stored music and downloadable music. (See Doc. 85-1 at 

30.) Nor has she pointed to testimony that she ever paid for two-credit songs. (See id.) 

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Therefore, although it is conceivable that Plaintiff downloaded music, she has offered no 

evidence to support a reasonable inference that she in fact did so. See Cafasso v. Gen. 

Dynamics C4 Sys., Inc., 637 F.3d 1047, 1061 (9th Cir. 2011) (“The evidence adduced [on 

summary judgment] by Cafasso establishes only that this set of events could conceivably 

have occurred; it does not give rise to a reasonable inference that it did in fact occur. To 

find liability on this evidence would require undue speculation.”).

Based on the admissible facts, the Court finds that Plaintiff has not shown a genuine 

dispute about whether she engaged in commerce. See Fraser v. Goodale, 342 F.3d 1032, 

1036 (9th Cir. 2003) (explaining that courts consider only admissible facts on summary 

judgment). There is evidence that Plaintiff used the jukebox and that the jukebox has 

internet capabilities; however, Plaintiff has offered no evidence that she ever used those 

capabilities, i.e., downloaded a song. Essentially, Plaintiff’s work—i.e., dancing and 

buying jukebox songs—was confined entirely to November Bar. She did not trade, 

transport, transmit, or communicate anything between states. 29 U.S.C. § 203(b) 

(“commerce” definition). She was not employed in the “channels of interstate commerce.” 

See McLeod v. Threlkeld, 319 U.S. 491, 493–94 (1943) (stating that “every employee in 

the ‘channels of interstate commerce’” is engaged in commerce (quoting Walling v. 

Jacksonville Paper Co., 317 U.S. 564, 567 (1943))). Nor were her activities “so closely 

related to the movement of . . . commerce as to be a part of it.” Id. at 497. At most, 

Plaintiff’s activities minimally “affect[ed] or indirectly relate[d] to interstate commerce”; 

this, however, is not enough. See id. (explaining that individual coverage requires conduct 

that does more than merely “affect or indirectly relate to interstate commerce”).

Plaintiff has suggested that it is enough that the jukebox connects to the internet. 

But the jukebox is not the instrumentality of interstate commerce, the internet is. Thus, the

purely local use of an internet jukebox does not constitute interstate commerce. See Mateo, 

240 F.2d at 833 (stating that the determination whether plaintiff engaged in commerce 

“must be guided by practical considerations, not technical conceptions”); Jian Long Li v. 

Li Qin Zhao, 35 F. Supp. 3d 300, 309 (E.D.N.Y. 2014) (“[T]he use of a cellular phone by 

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Li, but not for communication between states, is strictly an intrastate activity, 

notwithstanding the fact that it utilizes interstate technology.” (emphasis in original)). It is 

probably reasonable to infer that, at some point, Plaintiff danced to music that had been 

downloaded. However, dancing to music that was previously acquired through commerce 

does not qualify Plaintiff as an employee engaged in commerce. See McLeod, 319 U.S. at 

494 (explaining that employees do not engage in interstate commerce merely by handling 

goods that were previously in interstate commerce). 

Even were it reasonable to infer that Plaintiff downloaded music, she still would not 

satisfy the commerce requirement. In examining an employee’s activities, courts must 

focus on whether the employee’s duties involve or relate to interstate commerce. See 29 

C.F.R. § 776.10(b) (stating that an employee engages in commerce by using the 

instrumentalities of interstate commerce “as a regular and recurrent part of his duties” 

(emphasis added)). As explained above, Plaintiff’s work simply involved paying for and 

dancing to music; there is no evidence that Plaintiff was required to download music to do 

her work, nor is there evidence to support an inference of that requirement. Plaintiff has

offered no authority that the FLSA extends to those who use instrumentalities of interstate 

commerce outside the scope of their employment duties. See McLeod, 319 U.S. at 493 

(“Congress did not intend that the regulation of hours and wages should extend to the 

furthest reaches of federal authority.”).

Next, still assuming that Plaintiff downloaded music, there is no evidence that she 

did so regularly and recurrently. See Dean v. Pac. Bellwether, LLC, 996 F. Supp. 2d 1044, 

1047–48 (D.N. Mar. I. 2014) (stating that employees engage in commerce through “regular 

and recurrent” use of the instrumentalities of interstate commerce); 29 C.F.R. § 776.10(b)

(same). Plaintiff relies on the following statement in Dean to argue that occasional 

downloads would be sufficient: “Regular and recurrent use does not actually require much 

use; five independent uses annually may suffice.” 996 F. Supp. 2d at 1049 (citing 

Boekemeier v. Fourth Universalist Soc’y, 86 F. Supp. 2d 280, 283, 287–88 (S.D.N.Y. 

2000)). In a parenthetical, the Dean court summarized its understanding of the Boekemeier

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decision as follows: “[A]veraging between one and six purchases of supplies from out-ofstate vendors for six consecutive years satisfies [the] commerce requirement.” Id.

Boekemeier does not stand for that proposition. The parties in that case stipulated

that documentary evidence showed the plaintiff made between one and six purchases per 

year from five different vendors. Boekemeier, 86 F. Supp. 2d at 283. In finding that the 

plaintiff had engaged in commerce, the court relied not only on that stipulation but also on 

testimony “that plaintiff made ‘dozens’ of purchases from only one of these vendors, and 

that it was a ‘normal part’ of plaintiff’s duties to place orders with such vendors.” Id. at 

287. Contrary to what is stated in Dean, the Boekemeier court relied on more than a few 

sporadic purchases. Thus, the Dean court had no legal basis for asserting that “[r]egular 

and recurrent use does not actually require much use.” 996 F. Supp. 2d at 1049. For that 

reason, Dean is unpersuasive and should not be followed.

Moreover, to say that something occurs “regularly and recurrently” is to say that it 

occurs “time after time” “at fixed, uniform, or normal intervals.” Recurrent & Regular, 

Merriam-Webster’s Collegiate Dictionary (11th ed. 2003). In other words, it occurs often. 

See The Concise Oxford Dictionary 1459 (9th ed. 1995) (defining “time after time” to 

mean “repeatedly; on many occasions”). Plaintiff’s counsel effectively conceded at oral 

argument that if Plaintiff downloaded music, she did so without knowing it. Therefore, 

aside from pure speculation, Plaintiff has no way of showing a genuine dispute over 

whether she downloaded music on a “regular and recurrent” basis. See Cafasso, 637 F.3d 

at 1061 (affirming grant of summary judgment to defendant where liability could be found 

only with “undue speculation”); Loomis v. Cornish, 836 F.3d 991, 997 (9th Cir. 2016) 

(“[M]ere allegation and speculation do not create a factual dispute for purposes of summary 

judgment.” (quoting Nelson v. Pima Cmty. Coll., 83 F.3d 1075, 1081–82 (9th Cir. 1996))).

There are two final matters. First, Plaintiff has pointed to evidence that Defendants 

receive revenue from the jukebox. For purposes of individual coverage, it does not matter 

if the employer is engaged in commerce, because the “focus [is] on the activities of the 

employee[] and not on the business of the employer.” Lublin, 358 U.S. at 211 (citations 

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omitted). Defendants’ business activities are therefore of no consequence.

Finally, Plaintiff’s primary authority, Foster, is easily distinguishable. There, the 

district court observed that the defendant nightclub “maintain[ed] a subscription with 

Rhapsody.com, an online music-streaming service.” Foster, 2015 WL 8489998, at *1. In 

determining whether the plaintiff dancers were engaged in commerce, the court found this 

fact significant:

Based on the undisputed facts in the record, the court concludes that 

the plaintiffs qualify for individual coverage under the FLSA. Individual 

coverage exists for an employee who regularly use[s] the instrumentalities 

of interstate commerce in [her] work. It is well-settled that [t]he internet is 

an instrumentality of inter[state] commerce. Moreover, it is clear from the 

record that the Club’s dancers are required to regularly use the internet to 

perform the dances that they are hired to perform. See, e.g.[,] Harbour Dep. 

61 (confirming that the Club’s dancers use the internet to stream music for 

their performances); Carter Dep. 37 (acknowledging that the Club’s 

dancers perform using music that is streamed from the internet and that the 

dancers choose their own music). Consequently, the court concludes, as a 

matter of law, that the plaintiffs are individually covered under the FLSA.

Id. at *6 (internal quotation marks and some internal citations omitted); see Miller v. 

Centerfold Entm’t Club, Inc., No. 6:14-CV-6074, 2017 WL 3425887, at *3 (W.D. Ark. 

Aug. 9, 2017) (finding plaintiffs had individual coverage where “they would request songs 

from the DJ who would often stream the music over the Internet via YouTube”).

By dancing to music streamed over the internet, the dancers in Foster and Miller

“used” the internet to do their job.

7

 In contrast, here, there is no evidence that Plaintiff 

used the internet by dancing to streaming music or by downloading songs, let alone that 

she did so regularly as a part of her job duties. Therefore, Plaintiff has not met her 

responsive burden to demonstrate a genuine issue for trial. The Court finds that Defendants 

are entitled to summary judgment on the issue of individual coverage.

B. Enterprise Coverage

An employee has enterprise coverage if she works for an “enterprise engaged in 

 

7 Neither party analyzes whether the line drawn by Foster and Miller—i.e., that 

dancers engage in commerce by dancing to streaming music—is correct. The Court need 

not decide whether these cases are correct because, assuming they are, Plaintiff has not 

established that she engaged in a similar use of the internet.

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commerce.” 29 U.S.C. § 206(a). An enterprise is engaged in commerce if, among other 

things, it has annual gross revenue of at least $500,000. Id. § 203(s)(1)(A)(ii). Defendants 

contend there is no enterprise coverage because November Bar does not meet the threshold 

dollar requirement. The Court agrees.

In support of their argument, Defendants submit a declaration by Largent, who 

asserts that November Bar’s gross sales were $36,302 in 2015, $36,986 in 2016, and 

$24,394 in 2017. (Doc. 85-1 at 17.) Plaintiff objects to the declaration, arguing that it 

violates the best-evidence rule because November Bar’s profit-and-loss tax statements are 

the best evidence of gross receipts. Arguably, the best-evidence rule does not apply. 

Defendants are seeking to prove that they generate less than $500,000 in annual revenue, 

not that they made the specific amounts set forth in the tax statements. See Fed. R. Evid. 

1002, advisory committee notes (stating that the rule applies only where “contents [of a 

document] are sought to be proved”).

In any event, Plaintiff’s objection is meritless on another ground. “To survive 

summary judgment, a party does not necessarily have to produce evidence in a form that 

would be admissible at trial, as long as the party satisfies the requirements of Federal Rules

of Civil Procedure 56.” Block v. City of Los Angeles, 253 F.3d 410, 418–19 (9th Cir. 2001) 

(citing Celotex Corp., 477 U.S. at 324). A declaration may be considered on summary 

judgment if it is “made on personal knowledge,” “set[s] out facts that would be admissible 

in evidence,” and “show[s] that the . . . declarant is competent to testify on the matters 

stated.” Fed. R. Civ. P. 56(c)(4). As November Bar’s owner, Largent presumably is 

competent to testify about November Bar’s revenue and would have personal knowledge 

about how much revenue is generated. The facts offered by Largent would be admissible 

at trial in the form of Defendants’ tax statements. As such, Largent’s declaration satisfies 

Rule 56 and may be considered. See Hughes v. United States, 953 F.2d 531, 543 (9th Cir. 

1992) (finding it proper to consider a declaration on summary judgment although it

contained hearsay and violated the best-evidence rule).

Additionally, the tax statements are already in the record. (Doc. 26-2 at 29–34.) It 

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is within the Court’s discretion to consider materials in the record outside those presented 

with the summary-judgment briefing. Fed. R. Civ. P. 56(c)(3) (“The court need consider 

only the cited materials, but it may consider other materials in the record.”). And, 

moreover, Defendants were not required to produce evidence to shift the burden to 

Plaintiff: “[A] moving defendant may shift the burden of producing evidence to the 

nonmoving plaintiff merely by ‘showing’—that is, pointing out through argument—the 

absence of evidence to support plaintiff’s claim.” Fairbank, 212 F.3d at 532. Defendants 

have clearly argued that Plaintiff has no evidence that November Bar’s revenue is at least 

$500,000 per year.

Therefore, the burden is Plaintiff’s to show a genuine dispute of material fact. See 

Nissan Fire, 210 F.3d at 1103. Plaintiff contends that Defendants’ tax statements are 

inaccurate because Defendants did not track the amount of fees paid to them by Plaintiff

or other dancers. Plaintiff accuses Defendants of going “great lengths to destroy or hide 

evidence of” November Bar’s revenue and accordingly requests that summary judgment 

be granted as a sanction for spoliation of evidence. At oral argument, Plaintiff’s counsel 

conceded that the requested sanction is Plaintiff’s only method of establishing enterprise 

coverage.

The Court finds that Plaintiff has not met her responsive burden to demonstrate a 

triable issue. First, a sanction should not be granted. “A party’s destruction of evidence 

qualifies as willful spoliation if the party has ‘some notice that the documents were 

potentially relevant to the litigation before they were destroyed.’” Leon v. IDX Sys. Corp., 

464 F.3d 951, 959 (9th Cir. 2006) (emphasis omitted) (quoting United States v. Kitsap 

Physicians Serv., 314 F.3d 995, 1001 (9th Cir. 2002)). Plaintiff has pointed to no evidence 

that Defendants destroyed records in anticipation of this lawsuit. Her real complaint is that 

Defendants failed to keep certain records in the first place. However, she has offered no 

authority showing that Defendants were required to keep the desired records, or that 

summary judgment would be an appropriate remedy for violating that obligation.8 Simply 

 

8 The FLSA’s recordkeeping requirements apply only to employers who are subject 

to the FLSA. 29 U.S.C. § 211(c). To criticize Defendants for not complying with these 

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put, the acts complained of are not spoliation, nor has Plaintiff established that they were 

otherwise wrongful.

Plaintiff’s challenge to the accuracy of Defendants’ tax statements is no more 

persuasive. It is undisputed that November Bar is a cash-only bar, and that all cash received 

is first paid into the register and subsequently deposited into a bank account. (Doc. 83, ¶¶ 

40–42; Doc. 88, ¶¶ 40–42.) Contrary to Plaintiff’s argument, the accuracy of the amounts 

paid into the register and deposited into the bank is not affected by Defendants’ failure to

track the precise sums paid by each dancer. To illustrate, imagine that $100 is paid into 

the cash register and then later deposited into the bank. If Defendants cannot recall that 

Plaintiff paid $75 of the register’s contents and that another dancer paid $25, does that 

mean the bank’s record of a $100 deposit is inaccurate? Clearly, the answer is no. As 

such, it is not reasonable to infer that Defendants’ tax statements are inaccurate. Even were 

that a reasonable inference, it would not be reasonable to infer further that Defendants’ 

poor recordkeeping has resulted in the underreporting of more than $450,000 per year for 

multiple years.

Additionally, Plaintiff’s argument overlooks that Defendants were not required to 

produce evidence negating the annual-revenue requirement. Assuming the tax statements

are inadmissible, Defendants nevertheless have shifted the burden by arguing that Plaintiff 

is unable to prove her claims at trial. See Fairbank, 212 F.3d at 532. Because Plaintiff has 

come forward with no evidence, she has not met her responsive burden to show a genuine 

dispute of material fact.

9

 Accordingly, the Court finds that Defendants are entitled to 

summary judgment on the issue of enterprise coverage.

Plaintiff has not shown there is a triable issue whether she had individual or 

enterprise coverage. As a result, the Court will recommend that summary judgment be 

granted in favor of Defendants on Plaintiff’s FLSA claims. 

 

requirements, Plaintiff must first establish that compliance was required.

9

In the verified complaint, Plaintiff asserts that Defendants’ “gross annual volume of 

sales made or business done is greater than $500,000.” (Doc. 37, ¶ 20.) It was conceded 

at oral argument that this statement was not based on personal knowledge. This is 

confirmed by Plaintiff’s deposition testimony. (Doc. 88 at 19 (“Q: Do you have any reason 

to believe that it produces over $500,000 in annual revenue? A: I don’t have any.”).)

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II. Supplemental Jurisdiction

The district court may decline to exercise supplemental jurisdiction over state-law 

claims in several circumstances, including where it “has dismissed all claims over which it 

has original jurisdiction.” 28 U.S.C. § 1367(c)(3). “In the usual case in which all federallaw claims are eliminated before trial, the balance of factors to be considered under the 

pendent jurisdiction doctrine—judicial economy, convenience, fairness, and comity—will 

point toward declining to exercise jurisdiction over the remaining state-law claims.” 

Sanford v. MemberWorks, Inc., 625 F.3d 550, 561 (9th Cir. 2010) (brackets omitted) 

(quoting Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 n.7 (1988)).

Pursuant to § 1367(c)(3), the Court will recommend that the district court decline 

supplemental jurisdiction over Plaintiff’s AMWA and AMA claims. See Oliver v. Ralphs 

Grocery Co., 654 F.3d 903, 911 (9th Cir. 2011) (affirming the dismissal of state-law claims 

under § 1367(c)(3) following the grant of summary judgment on all federal claims); City 

of Colton v. Am. Promotional Events, Inc.-W., 614 F.3d 998, 1008 (9th Cir. 2010) (same).

Accordingly,

IT IS RECOMMENDED that the district court:

1. Deny Plaintiff’s motion for summary judgment (Doc. 82);

2. Partially grant Defendants’ motion for summary judgment (Doc. 84) to the 

extent Defendants challenge Plaintiff’s claims under the Fair Labor Standards Act (count 

one and count two of the verified complaint); and

3. Decline supplemental jurisdiction over Plaintiff’s claims under the Arizona 

Minimum Wage Act and Arizona Wage Act (count three and count four, respectively).

This recommendation is not an order that is immediately appealable to the Ninth 

Circuit Court of Appeals. The parties shall have fourteen days from the date of service of 

a copy of this recommendation within which to file specific written objections with the 

District Court. See 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b). The parties shall have 

fourteen days within which to file responses to any objections. Failure to file timely 

objections to this recommendation may result in the acceptance of the recommendation by 

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the District Court without further review. See United States v. Reyna-Tapia, 328 F.3d 

1114, 1121 (9th Cir. 2003) (en banc). Failure to file timely objections to any factual 

determination made in this recommendation may be considered a waiver of a party’s right 

to appellate review of the same finding in an order or judgment by the District Court which 

adopts the recommendation. See Fed. R. Civ. P. 72.

Dated this 26th day of December, 2019.

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