Smith et al v. Dolgencorp, LLC et al
MEMORANDUM OPINION AND ORDER GRANTING 15 MOTION to Sever Plaintiff Wendy Smith's Claims. Further, Ms. Smith's severed lawsuit is HEREBY STAYED and ADMINISTRATIVELY CLOSED pending arbitration. Mr. Richey will remain as the named plaintiff in this lawsuit (i.e., 1:16-CV-0959-VEH). Further, the Clerk is HEREBY DIRECTED to assign a new civil action case number to the severed claims of Ms. Smith and file in this Order of Severance as well as a copy of the original complaint. Signed by Judge Virginia Emerson Hopkins on 3/2/2017. (JLC)
2017 Mar-02 AM 10:47
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
WENDY SMITH and ALTON
) Case No.: 1:16-CV-0959-VEH
DOLGENCORP, LLC, d/b/a
DOLLAR GENERAL and KIMIKO )
THOMAS, a/k/a KIM THOMAS,
MEMORANDUM OPINION AND ORDER
This Fair Labor Standards Act (“FLSA”) lawsuit was initiated by Plaintiffs
Wendy Smith (“Ms. Smith”) and Alton Richey (“Mr. Richey”) on June 9, 2016. (Doc.
1). Pending before the court is Defendant Dolgencorp, LLC’s (“Dollar General”)
Motion To Sever Plaintiff Wendy Smith’s Claims and Compel Arbitration (Doc. 15)
(the “Motion”) filed on February 10, 2017. The Motion seeks “an order severing
[Ms.] Smith’s claims, compelling arbitration of [Ms.] Smith’s claims, and staying the
judicial proceeding in favor of arbitration.” (Doc. 15 at 2).
The Motion indicates within the case caption that it is opposed. However, the
14-day deadline for Ms. Smith to file her opposition under Appendix III of the court’s
Uniform Initial Order (Doc. 2) ran on February 24, 2017, and nothing was ever filed.
(Id. at 23). For the reasons explained below, the Motion is GRANTED and Ms.
Smith’s claims are SEVERED from this lawsuit and subject to arbitration as further
Ms. Smith’s Failure To Oppose
Ms. Smith’s failure to file any opposition to the Motion does not automatically
mean that the Motion is due to be granted. As explained by Judge Steele in Branch
Banking and Trust Co. v. Howard, No. 12–0175–WS–N, 2013 WL 172903, at *1
(S.D. Ala. Jan. 16, 2013), in the comparable situation of a non-movant’s failure to
oppose a motion to dismiss:
As noted, Churchill and Howard elected not to be heard in
response to BB & T’s Amended Motion to Dismiss. Notwithstanding
that omission, BB & T (as Rule 12(b)(6) movant) bears the initial
burden of demonstrating that it is entitled to dismissal of the
counterclaims. Churchill’s and Howard’s lack of response to the Rule
12(b)(6) Motion does not trigger the kneejerk granting of such Motion
on an abandonment theory. See Gailes v. Marengo County Sheriff’s
Dep’t, 2013 WL 81227, *5 (S.D. Ala. Jan. 4, 2013) (“the Court will not
treat a claim as abandoned merely because the plaintiff has not defended
it in opposition to a motion to dismiss”). Rather, it remains BB & T’s
burden as movant to establish its entitlement to relief under Rule
12(b)(6). In light of these circumstances, the Court scrutinizes BB & T’s
Motion to Dismiss in accordance with the following legal standard: “the
Court will review the merits of the [movant]’s position and, if it is
clearly incorrect or inadequate to satisfy the [movant]’s initial burden,
will deny the motion despite the [nonmovant]’s failure to respond. If,
however, the [movant]’s presentation is adequate to satisfy its initial
burden, the Court will not deny the motion based on arguments the
[nonmovant] could have made but by silence elected not to raise.” Id.
Branch Banking, 2013 WL 172903, at *1 (footnotes omitted).
Principles Governing Motions To Sever
Dollar General’s Motion is brought pursuant to Rule 21 of the Federal Rules
of Civil Procedure. (Doc. 15 at 8). Rule 21 provides:
Misjoinder of parties is not a ground for dismissing an action. On
motion or on its own, the court may at any time, on just terms, add or
drop a party. The court may also sever any claim against a party.
FED. R. CIV. P. 21 (emphasis added).
Severance under Rule 21 is directly related to permissive joinder of parties
under Rule 20. As Rule 20 pertains to joining plaintiffs in particular:
(1) Plaintiffs. Persons may join in one action as plaintiffs if:
(A) they assert any right to relief jointly, severally, or in the
alternative with respect to or arising out of the same
transaction, occurrence, or series of transactions or
(B) any question of law or fact common to all plaintiffs
will arise in the action.
FED. R. CIV. P. 20(a)(1) (emphasis added).
A district court’s decision to allow joinder or order severance is a discretionary
one. See, e.g., Nor-Tex Agencies, Inc. v. Jones, 482 F.2d 1093, 1100 (5th Cir. 1973)
(“The district judge acted within his discretion in allowing the joinder under Rule
20(a), as well as denying the motion for severance under Rule 20(b).”) (emphasis
added);1 see also Alexander v. Fulton County, Ga., 207 F.3d 1303, 1322 (11th Cir.
2000) (“We review a district court’s joinder of Plaintiffs’ claims and denial of
severance for abuse of discretion.”) (citing Nor-Tex Agencies), overruled on other
grounds by Manders v. Lee, 338 F.3d 1304, 1328 (11th Cir. 2003).
Dollar General bases its severance request on the grounds that Ms. Smith’s
claims “are subject to a valid, enforecable arbitration agreement” while Mr. Richey’s
are not. (Doc. 15 at 8). Therefore, before the court reaches the issue of severance, it
must first examine the underlying evidence and law relied upon by Dollar General to
verify whether Ms. Smith’s claims asserted in this lawsuit are subject to arbitration.
Attached to the Motion is a Dollar General Employee Arbitration Agreement
(Doc. 15-1) (the “Agreement”) which is dated March 24, 2015, and which is
In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), the
Eleventh Circuit adopted as binding precedent all decisions of the former Fifth Circuit handed
down prior to October 1, 1981.
electronically signed by Ms. Smith.2 (Doc. 15-1 at 8).3 The Agreement is expressly
governed by the Federal Arbitration Act (the “FAA”) (Doc. 15-1 at 7) and states in
You agree that, with the exception of certain excluded claims described
below, any legal claims or disputes that you may have against Dollar
General, its parent and subsidiary corporations, employees, officers and
directors arising out of your employment with Dollar General or
termination of employment with Dollar General (“Covered Claim” or
“Covered Claims”) will be addressed in the manner described in this
Agreement. You also understand that any Covered Claims that Dollar
General may have against you related to your employment will be
addressed in the manner described in this Agreement. . . .
The procedures in this Agreement will be the exclusive means of
resolving Covered Claims relating to or arising out of your employment
or termination of employment with Dollar General, whether brought by
you or Dollar General. This includes, but is not limited to, claims
alleging violations of wage and hour laws, state and federal laws
prohibiting discrimination, harassment, and retaliation, claims for
defamation or violation of confidentiality obligations, claims for
wrongful termination, tort claims, and claims alleging violation of any
other state or federal laws, except claims that are prohibited by law from
being decided in arbitration, and those claims specifically excluded in
the paragraph below.
(Doc. 15-1 at 6, 7 (emphasis added)).4 Because Ms. Smith’s two counts brought
The document reflects the name of Wendy Wyatt which Dollar General reports was the
name of Ms. Smith when she signed the Agreement. (Doc. 15 at 3 n.1).
All page references to Doc. 15-1 correspond with the court’s CM/ECF numbering
“Covered Claims do not include claims for unemployment benefits, workers’
compensation benefits . . . , whistleblower claims under the Sarbanes-Oxley Act, and claims for
benefits under the Employee Retirement Income Security Act. Covered claims also do not
against Dollar General are for violations of the FLSA overtime and minimum wage
provisions (Doc. 1 at 6-8 ¶¶ 31-40), her claims fall within the scope of “Covered
Claims” under the Agreement.
Whether the Agreement is enforceable is a mixed question of federal and state
law. See Employers Ins. of Wausau v. Bright Metal Specialties, Inc., 251 F.3d 1316,
1322 (11th Cir. 2001) (“Federal law establishes the enforceability of arbitration
agreements, while state law governs the interpretation and formation of such
agreements.” (citing Perry v. Thomas, 482 U.S. 483, 107 S. Ct. 2520, 96 L. Ed. 2d
426 (1987))). Turning to considerations under the FAA first, the United States
Supreme Court has explained:
The Arbitration Act provides that written agreements to arbitrate
controversies arising out of an existing contract “shall be valid,
irrevocable, and enforceable, save upon such grounds as exist at law or
in equity for the revocation of any contract.” 9 U.S.C. § 2. By its terms,
the Act leaves no place for the exercise of discretion by a district court,
but instead mandates that district courts shall direct the parties to
proceed to arbitration on issues as to which an arbitration agreement has
been signed. §§ 3, 4. Thus, insofar as the language of the Act guides our
disposition of this case, we would conclude that agreements to arbitrate
must be enforced, absent a ground for revocation of the contractual
Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218, 105 S. Ct. 1238, 1241, 84 L.
include claims pending in court as of the date this Agreement is signed by you, and claims
concerning the scope or enforceability of this Agreement.” (Doc. 15-1 at 7).
Ed. 2d 158 (1985) (emphasis in original). Therefore, the FAA leaves very little room
to challenge the validity of an arbitration agreement. See, e.g., Walthour v. Chipio
Windshield Repair, LLC, 745 F.3d 1326, 1329 (11th Cir. 2014) (“The FAA thus
‘embodies a liberal federal policy favoring arbitration agreements’ and seeks ‘to
relieve congestion in the courts and to provide parties with an alternative method for
dispute resolution that is speedier and less costly than litigation.’” (quoting Caley v.
Gulfstream Aerospace Corp., 428 F.3d 1359, 1367 (11th Cir. 2005) (internal
quotation marks omitted))).
Further, the Agreement is governed by the FAA pursuant to Alabama
substantive standards. More specifically, “(1) there is a written agreement calling for
arbitration, and (2) the contract in which the arbitration agreement appears relates to
a transaction involving interstate commerce.” (Doc. 15 at 6); see also Prudential Sec.,
Inc. v. Micro-Fab, Inc., 689 So. 2d 829, 832 (Ala. 1997) (same) (citing Maxus, Inc.
v. Sciacca, 598 So. 2d 1376 (Ala. 1992)).
As demonstrated above, the writing prong has undoubtedly been met.
Moreover, Ms. Smith’s complaint confirms that the interstate commerce component
is satisfied. (See, e.g., Doc. 1 at 3 ¶ 12 (“Dollar General is an enterprise engaged in
interstate commerce or in the production of goods for commerce for the purposes of
the Fair Labor Standards Act . . . .”)); (id. at 4 ¶ 21 (“The plaintiffs are employees
who were engaged in interstate commerce, engaged in the production of goods for
commerce, and/or employed by an enterprise engaged in commerce or in the
production of goods for commerce . . . .”)).
Finally, no ground for revocation of the Agreement arising under Alabama law
is readily apparent from the record.5 Therefore, Ms. Smith’s claims are subject to
arbitration as mandated by the FAA.
Having found that the arbitration of Ms. Smith’s FLSA claims is required, the
court must now decide whether to sever this lawsuit. Dollar General’s Motion lacks
specific case authority showing that an order of severance is within this court’s
discretion under the arbitrable versus non-arbitrable circumstances presented here.
At the same time, this court recognizes that the level of discretion afforded to it under
[i]s so broad that courts have “virtually unfettered discretion in
determining whether or not severance is appropriate.” Id. (quoting
Grigsby v. Kane, 250 F. Supp. 2d 453, 456 (M.D. Pa. 2003) (internal
quotation marks omitted)). Whether severance would facilitate
settlement or judicial economy is among the factors a court may examine
while determining whether to sever the claims. See id. Additionally, a
The court notes that the Agreement precludes bringing FLSA claims “as a class,
collective or representative action.” (Doc. 15-1 at 6). In Walthour, the Eleventh Circuit found that
these types of waiver provisions when applied to FLSA claims, were enforceable under the FAA.
See Walthour, 745 F.3d at 1334 (“After examining the FLSA’s text, legislative history, purposes,
and these Supreme Court decisions, we discern no ‘contrary congressional command’ that
precludes the enforcement of plaintiffs’ Arbitration Agreements and their collective action
court may consider “the convenience of the parties, avoiding prejudice,
promoting expedition and economy, and the separability of law and
logic.” Old Colony Ventures I, Inc. v. SMWNPF Holdings, Inc., 918 F.
Supp. 343, 350 (D. Kan. 1996) (citation omitted).
Tillis v. Cameron, No. 1:07-CV-0078-WKW, 2007 WL 2806770, at *5 (M.D. Ala.
Sept. 25, 2007) (emphasis added). Therefore, despite Dollar General’s failure to fully
develop this issue with any on-point case authority, the court concludes that a
severance based upon judicial economy is warranted because of the widely diverging
procedural tracks that Ms. Smith’s claims will follow in arbitration versus those of
Mr. Richey that will proceed in litigation before this court. Cf. Collins & Aikman
Prod. Co. v. Bldg. Sys., Inc., 58 F.3d 16, 20 (2d Cir. 1995) (“If some claims are
non-arbitrable, while others are arbitrable, then we will sever those claims subject to
arbitration from those adjudicable only in court.”); id. (“Indeed, there is no reason
why, in a proper case, we cannot sever even a part of a claim, where that claim raises
both arbitrable and non-arbitrable issues.”).
Accordingly, Dollar General Motion’s is GRANTED and Ms. Smith’s claims
are HEREBY SEVERED from the claims of Mr. Richey. Mr. Richey will remain as
the named plaintiff in this lawsuit (i.e., 1:16-CV-0959-VEH). Further, the clerk is
HEREBY DIRECTED to assign a new civil action case number to the severed
claims of Ms. Smith and file in this order of severance as well as a copy of the
original complaint. The new case as well as this action shall both be assigned to the
Further, Ms. Smith’s severed lawsuit is HEREBY STAYED and
ADMINISTRATIVELY CLOSED pending arbitration. Upon good cause shown by
either side, the court will grant a motion to reinstate this lawsuit as an active case.
DONE and ORDERED this 2nd day of March, 2017.
VIRGINIA EMERSON HOPKINS
United States District Judge
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