Desimoni et al v. TBC Corporation

Filing 164

ORDER adopting 158 REPORT AND RECOMMENDATIONS re 144 MOTION for miscellaneous relief, specifically to Preclude Class Arbitration filed by TBC Corporation. United States Magistrate Judge Carol Mirando's Report and Recom mendation 158 is ACCEPTED and ADOPTED, and its findings incorporated herein. Defendant's Motion to Preclude Class Arbitration 144 is GRANTED. The case remains stayed as to Plaintiff Corey Desimoni and opt-in Plaintiffs Luis Rodriguez and Au gustin Benitez, and the 152 opt-in Plaintiffs identified in Attachment C to the arbitration demand before the American Arbitration Association (See Doc. 108-4), pending notification these Plaintiffs have exhausted arbitration and the stay is due to b e lifted or the case is due to be dismissed. The Clerk is directed to add a stay flag to this case. Plaintiffs' counsel is directed to file a status report regarding the arbitration beginning on May 18, 2017, and every 90 days thereafter. Thi s case will remain open and proceed on all Plaintiffs listed in the attachment to this Opinion and Order. Signed by Judge Sheri Polster Chappell on 4/18/2017. (LMF) (Additional attachment(s) added on 4/18/2017: # 1 Supplement Attachment A) (LMF).

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
COREY DESIMONI and JAMES
REITER, individually and on behalf of all
similarly situated,
Plaintiffs,
v.

Case No: 2:15-cv-366-FtM-99CM

TBC CORPORATION,
Defendant.
/
OPINION AND ORDER1
This matter comes before the Court on United States Magistrate Judge Carol
Mirando’s Report and Recommendation (Doc. 158) dated March 13, 2017.

Judge

Mirando recommends granting Defendant’s Motion to Preclude Class Arbitration. (Doc.
144). The parties have filed timely objections to the Report and Recommendation, and
Defendant has responded to Plaintiffs’ objections. (Doc. 159; Doc. 160; Doc. 162). For
the reasons set forth below, the Report and Recommendation is accepted and adopted.
BACKGROUND
Corey Desimoni and James Reiter initiated this action on June 19, 2015 by filing a
one-count Complaint (Doc. 1) on behalf of themselves and other similarly-situated

1

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individuals against their former employer, TBC Corporation (Defendant or TBC).2
Plaintiffs claim they (and others) were misclassified and therefore denied overtime
compensation in violation of the Fair Labor Standards Act (FLSA). On July 7, 2016, the
Court compelled arbitration as to Desimoni and opt-in claimant Luis Rodriguez and
ordered that they proceed to arbitration on an individual basis. (Doc. 61). The Court also
conditionally certified the case as a collective action on that same day. (Doc. 60).
Following this Court’s Order compelling individual arbitration as to Desimoni and
Rodriguez, Desimoni and Rodriguez filed a Class Arbitration Demand before the
American Arbitration Association (AAA), identifying 152 opt-in Plaintiffs from this case as
parties to the arbitration demand. (Doc. 108-1, ¶ 48; Doc. 108-4).
Defendant states that each of the 152 opt-in Plaintiffs signed identical Arbitration
Agreements that explicitly prohibit class or collective arbitration, and therefore moves to
preclude class arbitration from going forward. (Doc. 144 at 1-2, Ex. A). In support,
Defendant submits the signed Arbitration Agreement for each of the 152 opt-in Plaintiffs.
(Doc. 144-1). Defendant requests that the Court order Desimoni to withdraw his demand
for class or collective arbitration and order that the 152 Plaintiffs submit to arbitration on
an individual basis in compliance with this Court’s Order (Doc. 61) and the Arbitration
Agreements they signed and agreed to.
Judge Mirando found that the Arbitration Agreement specifically provides that a
court, and not an arbitrator, must decide any issue concerning the enforceability or validity
of a class and collective action waiver. (Doc. 158 at 4-5). Upon review of the waiver,

TBC’s sole objection to the Report and Recommendation is that it did not employ Desimoni or
Reiter. (Doc. 160). The Court accepts that the Complaint alleges that Plaintiffs were employed
by TBC (Doc. 1, ¶ 62), but this has no bearing on the Court’s consideration of the Report and
Recommendation.
2

2

Judge Mirando found that the Arbitration Agreement waives a party’s right to class
arbitration, relying in part on the Eleventh Circuit’s opinion in Walthour v. Chipio
Windshield Repair, LLC, 745 F.3d 1326, 1334-35 (11th Cir. 2014). Judge Mirando
recommends that Desimoni be ordered to withdraw his demand for class or collective
arbitration.
LEGAL STANDARD
After conducting a careful and complete review of the findings and
recommendations, a district judge may accept, reject, or modify the magistrate judge's
report and recommendation. See 28 U.S.C. § 636(b)(1); see also Williams v. Wainwright,
681 F.2d 732 (11th Cir. 1982).

In the absence of specific objections, there is no

requirement that a district judge review factual findings de novo, Garvey v. Vaughn, 993
F.2d 776, 779 n.9 (11th Cir. 1993), and the court may accept, reject, or modify, in whole
or in part, the findings and recommendations, 28 U.S.C. § 636(b)(1)(C). The district judge
reviews legal conclusions de novo, even in the absence of an objection. See CooperHouston v. Southern Ry. Co., 37 F.3d 603, 604 (11th Cir. 1994).
DISCUSSION
Plaintiffs argue that the Report and Recommendation fails to interpret the
Arbitration Agreement and that the agreements are contradictory as to whether an
arbitrator or a court may determine the construction of an arbitration clause and Plaintiffs
believe that the arbitrator should decide the ultimate meaning of the agreements.
Specifically, Plaintiffs argue that although the agreements state that a court will determine
the validity of a waiver and that the parties waive class or collective arbitration, the
agreements also state that the AAA Supplementary Rules for Class Arbitrations will apply,

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and incorporates the AAA Rules. The AAA Rules state that an arbitrator will interpret the
arbitration clause. Yet, in this regard the Arbitration Agreement states:
Any Arbitration will be in accordance with the then current employment
arbitration rules and procedures of AAA, except to the extent any such rules
and/or procedures are in conflict with any express term of this Agreement,
in which case such term of this Agreement will control.
(Doc. 19-2 at 2).
As Judge Mirando correctly determined, the Arbitration Agreement explicitly states
that any claims against TBC must proceed to arbitration as individual claims only. (Id. at
¶¶ 1-2).

Although Plaintiffs believe that Judge Mirando should have conducted an

analysis of the parties’ intent in drafting the Arbitration Agreement, and construe it against
Defendant as the drafter, the contract’s language is the best evidence of the parties’
intent, and a court should look to the contract’s plain meaning when interpreting it. Royal
Oak Landing Homeowner’s Ass’n, Inc. v. Pelletier, 620 So. 2d 786, 788 (Fla. 4th DCA
1993); Herpich v. Estate of Herpich, 994 So. 2d 1195, 1197 (Fla. 5th DCA 2008). The
Court finds no error in Judge Mirando’s analysis.
Under the terms of the Arbitration Agreement which are particularly broad, the
parties agreed that a judge, not an arbitrator, would decide whether Plaintiffs’ claims must
proceed to arbitration as individual claims only or may proceed to arbitration on behalf of
a class.3 (Doc. 19-2.) Under the Agreement, class arbitration is forbidden and the parties
agreed to individual arbitration. Parties may agree to collective action and classwide
arbitration waivers in arbitration agreements. Walthour, 745 F.3d at 1334-35; Cruz v.

The arbitrator below recently entered an Order Staying Arbitration pending this Court’s ruling on
the instant motion. (Doc. 163-1). The arbitrator left open the issue of whether it will stay
consideration of the arbitration until the U.S. Supreme Court’s decision in the matters of Ernst &
Young, LLP v. Morris, NLRB v. Murphy Oil USA Inc., and Epic Systems Corp. v. Lewis, which
involve the lawfulness of class and collective action waivers in arbitration agreements.
3

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Cingular Wireless, LLC, 648 F.3d 1205, 1215-16 (11th Cir. 2011) (citing AT&T Mobility
LLC v. Concepcion, 563 U.S. 333, 344 (2011)) (finding that to the extent Florida law would
require the availability of classwide arbitration procedures, it would be inconsistent with
and preempted by FAA § 2).
According to the FAA, any “written [arbitration] provision in ... a contract evidencing
a transaction involving commerce ... 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. “Accordingly, the FAA requires a court to either stay or dismiss a lawsuit and to
compel arbitration upon a showing that (a) the plaintiff entered into a written arbitration
agreement that is enforceable under ordinary state-law contract principles and (b) the
claims before the court fall within the scope of that agreement.” Lambert v. Austin Ind.,
544 F.3d 1192, 1195 (11th Cir. 2008). A court may only order parties to arbitration when
it is “satisfied that the making of the agreement for arbitration ... is not in issue.” 9 U.S.C.
§ 4. “The principal purpose of the [Federal Arbitration Act (FAA)] is to ensure private
arbitration agreements are enforced according to their terms.” Concepcion, 563 U.S. at
344.
The Court previously directed Plaintiffs Desimoni and Rodriguez to proceed to
individual arbitration. (Doc. 61). Instead, Desimoni filed a demand for arbitration on their
behalf, and on behalf of 152 opt-in Plaintiffs, arguing that the Arbitration Agreement allows
him to do so or is at least ambiguous whether he may. Yet, this is in contravention of the
plain language of the Arbitration Agreements which Plaintiffs have not disputed that each
of the 152 opt-in Plaintiffs signed and agreed to.4 See Doc. 144-1. Therefore, all Plaintiffs

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The Court is mindful that the National Labor Relations Board Administrative Law Judge found
that Defendants’ class action waiver provision in the Arbitration Agreement to be in violation of

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in this matter currently before the American Arbitration Association (Doc. 108-1; Doc. 1084 (list)), may only proceed to arbitration individually and not on behalf of a class.5 The
Court also notes that Defendant submitted an Arbitration Agreement signed by opt-in
Plaintiff Agustin Benitez (Doc. 144-1, pp. 16-19), but Benitez was not included in the Class
Arbitration Demand (Doc. 108-4). Because Benitez agreed to arbitration he must proceed
to arbitration as well. This matter will be stayed as to these Plaintiffs for the duration of
the arbitration.
The remaining opt-in Plaintiffs not currently proceeding to arbitration have been
moving forward with litigating this case, including filing responses to the Court’s
Interrogatories.6 See Docs. 110-133. Although the FLSA Scheduling Order (Doc. 69)
requires that the interrogatories be answered under oath or penalty of perjury, numerous
interrogatory responses were unsigned. See Docs. 122-133. Furthermore, the Court has
received no interrogatory responses from Plaintiff James Reiter and he was not included
in the Arbitration Demand. Therefore, the Court will enter a new FLSA Scheduling Order
which will govern the collective action Plaintiffs under separate cover. The schedule will

federal labor law, and Defendant is appealing that decision to the NLRB. (Doc. 108-2; Doc. 159
at 8). Judge Mirando addressed this in her Report and Recommendation (Doc. 158 at 5-6) and
found that the ALJ’s decision does not strip the Court’s jurisdiction under the FLSA to determine
the issues raised in the case. The Court agrees. While orders of the NLRB enjoy considerable
deference, they are not binding precedent. See NLRB v. U.S. Postal Serv., 888 F.2d 1568, 157071 (11th Cir. 1989).
Given the Court’s finding, to the extent that Desimoni and Rodriguez continue to pursue claims
at arbitration on behalf of a class, it is doubtful the Court would enforce any resulting class
arbitration award.
5

6

Indeed, three opt-in Plaintiffs who are included in the arbitration demand also filed responses to
the Court’s interrogatories. (Docs. 110-1 Guillermo Jimenez, 120-1 Jason Stacy, 129-1 Jeffery
Miller).

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include a deadline for signed responses to the Court’s Interrogatories to be filed. The
Court attaches a list of the collective action Plaintiffs to this Opinion and Order.7
Accordingly, it is now
ORDERED:
(1)

United

States

Magistrate

Judge

Carol

Mirando’s

Report

and

Recommendation (Doc. 158) is ACCEPTED and ADOPTED, and its findings
incorporated herein.
(2)

Defendant’s Motion to Preclude Class Arbitration (Doc. 144) is GRANTED.

(3)

The case remains stayed as to Plaintiff Corey Desimoni and opt-in Plaintiffs

Luis Rodriguez and Augustin Benitez, and the 152 opt-in Plaintiffs identified in Attachment
C to the arbitration demand before the American Arbitration Association (See Doc. 1084), pending notification these Plaintiffs have exhausted arbitration and the stay is due to
be lifted or the case is due to be dismissed. The Clerk is directed to add a stay flag to
this case. Plaintiffs’ counsel is directed to file a status report regarding the arbitration
beginning on May 18, 2017, and every 90 days thereafter.
(4)

This case will remain open and proceed on all Plaintiffs listed in the

attachment to this Opinion and Order.
DONE and ORDERED in Fort Myers, Florida this 18th day of April, 2017.

Copies: All Parties of Record

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The attached list encompasses all individuals who have opted-in to the collective action but were
not included in the Arbitration Demand, and for which the Court has not otherwise received an
Arbitration Agreement.

7