Jones v. Waffle House, Inc. et al

Filing 136

ORDER denying 125 Motion to supplement; granting 127 motion to stay. This case is STAYED pending resolution of Waffle House, Inc. and WH Capital, LLC's interlocutory appeal. The Clerk is DIRECTED to terminate all pending motions and administratively close the case. Signed by Judge Roy B. Dalton, Jr. on 8/31/2016. (VMF)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
WILLIAM JONES,
Plaintiff,
v.

Case No. 6:15-cv-1637-Orl-37DAB

WAFFLE HOUSE, INC.; WH CAPITAL,
LLC; THE SOURCE FOR PUBLIC
DATA, L.P.; SHADOW SOFT, INC.;
HARLINGTON-STRAKER-STUDIO,
INC.; and DALE BRUCE
STRINGFELLOW,
Defendants.
ORDER
This cause is before the Court on the following:
1.

Waffle House, Inc. and WH Capital, LLC’s Motion for Leave to Supplement
the Record (Doc. 125), filed August 19, 2016;

2.

Plaintiff’s Opposition to the Motion of Waffle House, Inc. and WH Capital,
LLC to Supplement the Record (Doc. 132), filed August 29, 2016;

3.

Waffle House, Inc. and WH Capital, LLC’s Motion to Stay Proceedings
Pending Appeal of Court’s Order Denying Motion to Compel Arbitration
(Doc. 127), filed August 19, 2016; and

4.

Plaintiff’s Opposition to the Motion of Waffle House, Inc. and WH Capital,
LLC to Stay Proceedings Pending Appeal of Court’s Order Denying Motion
to Compel Arbitration (Doc. 133), filed August 29, 2016.

Upon consideration, the Court finds that: (1) the Motion to Stay is due to be granted; and
(2) the Motion to Supplement is due to be denied.

BACKGROUND
The instant putative class action concerns Plaintiff’s allegations that Defendants’
practices in procuring background checks on job applicants violate the Fair Credit
Reporting Act (“FCRA”). (See Doc. 1.) Specifically, Plaintiff alleges that upon applying for
employment at a Waffle House location, Defendants Waffle House, Inc. and WH Capital,
LLC (collectively, “Waffle House”) used The Source for Public Data (“Public Data”)1 to
run a background report on him and then declined to hire him based on the contents of
such report, circumventing the FCRA’s mandatory procedures in the process. (See id.)
Curiously, several months after initiating the instant action, Plaintiff again applied
for employment at another Waffle House location and was hired. (Doc. 81-1, pp. 2–4.) As
a condition of his employment, Plaintiff signed an arbitration agreement (“Arbitration
Agreement”), which was countersigned by Waffle House’s general counsel. (Doc. 81-2,
p. 14; see also Doc. 83, p. 14.) Upon discovering the Arbitration Agreement, Waffle
House moved to compel arbitration. (Doc. 81 (“Motion to Compel”).) On July 21, 2016,
the Court held a hearing on the Motion to Compel (“Hearing”). (See Doc. 121.) Ultimately,
based on the impropriety of the ex parte communication that precipitated the execution
of the Arbitration Agreement, the Court denied the Motion to Compel in the exercise of its
managerial authority to govern the conduct of counsel in collective actions. (Doc. 122
(“Denial Order”).) Waffle House subsequently appealed. (See Doc. 126.)
Waffle House now moves to stay these proceedings pending the resolution of its
appeal. (Doc. 127 (“Motion to Stay”).) Additionally, Waffle House requests leave to
1

In light of their intra-corporate relationship, the Court refers to Defendants The
Source for Public Data, Shadowsoft, Inc., Harlington-Straker-Studio, Inc., and Dale Bruce
Stringfellow collectively as Public Data.

2

supplement the record in support of the Motion to Compel. (Doc. 125 (“Motion to
Supplement”).) Plaintiff opposes both motions. (Docs. 132, 133.)
STANDARDS
I.

Motion to Stay
Under 9 U.S.C. § 16, parties are authorized to take an interlocutory appeal of an

order denying a motion to compel arbitration. “By providing a party who seeks arbitration
with swift access to appellate review, Congress acknowledged that one of the principal
benefits of arbitration, avoiding the high costs and time involved in judicial dispute
resolution, is lost if the case proceeds in both judicial and arbitral forums.” Blinco v. Green
Tree Servicing, LLC, 366 F.3d 1249, 1251 (11th Cir. 2004). Thus, “[w]hen a litigant files
a motion to stay litigation in the district court pending an appeal from the denial of a motion
to compel arbitration, the district court should stay the litigation so long as the appeal is
non-frivolous.” Id. at 1253.
II.

Motion to Supplement
The U.S. Court of Appeals for the Eleventh Circuit reviews motions to supplement

the record on a case-by-case basis. Young v. DeVaney ex rel. City of Augusta, Ga.,
59 F.3d 1160, 1168 (11th Cir. 2010). In making this determination, the Eleventh Circuit
considers, inter alia, “whether the additional material would be dispositive of pending
issues in the case and whether interests of justice and judicial economy would thereby
be served.” Id. The Eleventh Circuit also permits supplementation of the record to aid the
court in making an informed decision. Id.

3

DISCUSSION
I.

Motion to Stay
In its Motion to Stay, Waffle House represents that there is a reasonable basis

under the law to support its appeal, thereby rendering such appeal non-frivolous.
(Doc. 127, p. 2.) The Court agrees. In particular, Waffle House maintains that “[t]here is
no evidence of any misconduct in this case,” and that the circumstances surrounding the
execution of the Arbitration Agreement reveal nothing other than “a knowing and voluntary
assent on Plaintiff’s part to Waffle House’s standard [A]ribtration [A]greement through a
transaction initiated by Plaintiff.” (Id. at 5.) Though the Court disagrees with this position,
Waffle House is entitled to litigate it on appeal.
Plaintiff’s response to the contrary is not well taken. Inter alia, Plaintiff argues that:
(1) there is no reason to stay the action as to Public Data, who was not a party to the
Arbitration Agreement; (2) the appeal is meritless; and (3) Waffle House has appealed
the Denial Order for ulterior purposes—namely, as a “stratagem to prevent this Court from
promptly ruling on Plaintiff’s motion for class certification.” (Doc. 133.)
As an initial matter, the Court has already concluded that the appeal is
non-frivolous. In his counterargument, Plaintiff merely expounds on the position he
advanced in response to the Motion to Compel. However, the Court will not deem the
appeal meritless simply because Plaintiff believes his position is more meritorious.
Second, regardless of any ulterior purpose that Plaintiff attributes to Waffle House,
the Court concludes that a stay of the entire litigation promotes judicial economy. As
recognized by courts within this Circuit, “considerations of resources and time further
warrant depriving a district court of its authority to proceed in a case during an appeal

4

when the appeal concerns a party’s right not to litigate the dispute at all.” Lawson v. Life
of S. Ins. Co., 738 F. Supp. 2d 1376, 1381 (M.D. Ga. 2010). Moreover, the classes that
Plaintiff seeks to certify in this action are framed in terms of the contested practices of
both Waffle House and Public Data. (See Doc. 108, pp. 1–2.) Given the connected nature
of the challenged conduct, the Court declines to proceed with this action in piecemeal
fashion. Indeed, in the event that the Eleventh Circuit affirms the Court’s Denial Order,
this action—if not stayed—would likely have proceeded to a stage where it would then be
impractical to reinsert Waffle House into the litigation. Therefore, the Court finds that the
Motion to Stay is due to be granted.
II.

Motion to Supplement
Turning to the Motion to Supplement, Waffle House points to a number of facts

proffered at the Hearing concerning the execution of the Arbitration Agreement.
(Doc. 125, p. 1.) Waffle House seeks to supplement the record with the documents and
testimony underlying these proffered facts. (Id. at 2.) Waffle House represents that it flew
two witnesses to the Hearing to testify on its behalf, but the Court purportedly did not
enter testimony or supporting documents into evidence because the Hearing was not
evidentiary in nature. (Id. at 1–2.) However, at no point during the Hearing did Waffle
House inform the Court that it wished to introduce witness testimony or documentary
evidence into the record.
In any event, the Court agrees with Plaintiff that “the evidence Waffle House hopes
to proffer will make no difference on appeal” because the Denial Order presumed and
recounted the existence of such facts. (Doc. 132, pp. 1–2.) Such supplemental material
would certainly not be dispositive of any pending issue in this action, nor would it aid the

5

Eleventh Circuit in making an informed decision. See Young, 59 F.3d at 1168. Thus, the
Court declines to supplement the record with documents and testimony that it did not
consider in reaching its Denial Order. See id. (stating that a reviewing court generally will
not consult evidence that was not first considered in the district court).
CONCLUSION
Accordingly, it is hereby ORDERED AND ADJUDGED:
1.

Waffle House, Inc. and WH Capital, LLC’s Motion to Stay Proceedings
Pending Appeal of Court’s Order Denying Motion to Compel Arbitration
(Doc. 127) is GRANTED.

2.

Waffle House, Inc. and WH Capital, LLC’s Motion for Leave to Supplement
the Record (Doc. 125) is DENIED.

3.

This case is STAYED pending resolution of Waffle House, Inc. and
WH Capital, LLC’s interlocutory appeal of the Court’s Order denying their
motion to compel arbitration. All outstanding deadlines are hereby
suspended.

4.

The Clerk is DIRECTED to terminate all pending motions and
administratively close the case. The Court will take such motions under
advisement upon the reopening of the case.

DONE AND ORDERED in Chambers in Orlando, Florida, on August 31, 2016.

6

Copies:
Counsel of Record

7