The suit, filed by former bar manager Jeanette Stratton, centers on her employment at Silverlud, Inc. d/b/a Circus Show Bar from March 2023 through December 2025. Stratton alleged that the employer required her to pay or assign 20% of her earned tip wages each shift to the establishment’s doorman.

Stratton further claimed that Circus Show Bar executed a scheme involving exotic dancer entertainers. She alleged that customers paid credit card tips to or for the direct benefit of the dancers directly to her at the bar, which the employer then issued to her. She was required to cash out the check and distribute the portion containing the dancers' tips in cash to the entertainers.

The complaint alleges that at the conclusion of each year of her employment, the defendant issued substantially inflated IRS 1099s or W-2s. These forms falsely denoted that the employer paid Stratton and that she received and retained all credit card tip money, including the funds she was required to pass on to the dancers.

Stratton asserted four counts: violations of the Fair Labor Standards Act, the Maryland Wage and Hour Law, the Maryland Wage Payment and Collection Law, and her rights under 26 U.S.C. § 7434.

The defendant moved to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), arguing that the federal claims were not ripe and were factually intertwined with state statutory claims.

Judge Rubin rejected the jurisdictional challenge, noting that the defendant failed to cite a single authority in support of its arguments beyond a reference to 26 U.S.C. § 7434 and the supplemental jurisdiction statute.

The court held that the plaintiff’s claims under the FLSA and 26 U.S.C. § 7434 presented federal questions on the face of the complaint, establishing subject matter jurisdiction under 28 U.S.C. § 1331.

Regarding the 12(b)(6) challenge, Judge Rubin again noted the defendant’s failure to cite legal authority. The court stated it would not undertake the role of finding support for the defendant’s unsupported arguments.

The judge also found the defendant’s substantive arguments unpersuasive, noting they misconstrued the allegations, improperly relied on proof requirements not applicable at the motion to dismiss stage, and attempted to resolve merits contests.

The court ordered the defendant to answer the complaint in accordance with the Federal and Local Rules.