Earl et al v. Briad Restaurant Group, LLC

Filing 27

ORDER. IT IS HEREBY ORDERED that 5 Plaintiffs' Motion for Summary Judgment is DENIED without prejudice with permission to renew within thirty days of the Supreme Court's decision in Morris. IT IS FURTHER ORDERED that 13 De fendant's Motion to Dismiss is DENIED without prejudice with permission to renew within thirty days of the Supreme Courts decision in Morris. IT IS FURTHER ORDERED that this case is STAYED pending a decision of the Supreme Court in M orris. Beginning on 1/7/18, the parties must submit a joint status report updating the Court on the status of this case every ninety days. Signed by Chief Judge Gloria M. Navarro on 8/8/17. (Copies have been distributed pursuant to the NEF - ADR)

1

UNITED STATES DISTRICT COURT

2

DISTRICT OF NEVADA

3
4
5
6

TOBY EARL, an individual; SHYHEEM
SMITH, an individual; DEATRA ENARI,
and individual; MICHELLE PICKTHALL,
an individual; and JAMES SKADOWSKI,
an individual,

7
8

Plaintiffs,
vs.

9
10
11
12

BRIAD RESTAURANT GROUP, LLC, a
New Jersey limited liability company; and
DOES 1 through 100, inclusive,
Defendants.

)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)

Case No.: 2:16-cv-02217-GMN-PAL
ORDER

13
14

Pending before the Court is the Motion for Summary Judgment, (EFC No. 5), filed by

15

Plaintiffs Toby Earl, Deatra Enari, Michelle Pickthall, James Skadowski, and Shyheem Smith

16

(collectively “Plaintiffs”). Defendant Briad Restaurant Group, LLC (“Defendant”) filed a

17

Response, (ECF No. 20), and Plaintiffs filed a Reply, (ECF No. 21).

18

Also pending before the Court is the Motion to Dismiss, (ECF No. 13), filed by

19

Defendant. Plaintiffs filed a Response, (ECF No. 17), and Defendant filed a Reply, (ECF No.

20

19). However, because the Court finds that the Supreme Court’s decisions in Murphy Oil,

21

U.S.A., Inc. v. NLRB, 808 F.3d 1013 (5th Cir. 2015); Morris v. Ernst & Young, LLP, 834 F.3d

22

975, 984 (9th Cir. 2016); and Patterson v. Raymours Furniture Co., Inc., 2016 WL 4598542, at

23

*2 (2d Cir. Sept. 2, 2016), as corrected (Sept. 7, 2016), as corrected (Sept. 14, 2016)

24

(collectively “Morris”) are dispositive in determining whether class-arbitration waivers in

25

arbitration agreements are valid and enforceable, the case is STAYED pending the Supreme
Court’s decision in Morris, and the pending motions are DENIED without prejudice.
Page 1 of 5

1

I.

BACKGROUND

2

A.

3

This dispute arises out of alleged violations of an amendment to the Nevada Constitution

Procedural History

4

setting certain minimum wage requirements for employers known as the Minimum Wage

5

Amendment (“MWA”). Plaintiffs are current and former employees of various TGI Friday’s

6

restaurant chain locations throughout Nevada, which are owned by Defendant. On May 19,

7

2014, Plaintiffs initiated the original Hanks case, Hanks, et al. v. Briad Restaurant Group, LLC,

8

No. 2:14-cv-00786-GMN-PAL (D. Nev. 2014), allegedly as a result of Defendant’s failure to

9

pay Plaintiffs the lawful minimum wage, because Defendant improperly claimed eligibility to

10

compensate employees at a reduced minimum wage rate under Nev. Const. art. XV, § 16. (See

11

Compl. ¶ 3–4, ECF No. 1).

12

On July 27, 2015, the Court dismissed five Plaintiffs from the Hanks action who were

13

parties to various arbitration agreements and ordered them to arbitrate their MWA claims

14

against Defendant. (Order, Hanks case, ECF No. 93). On September 20, 2016, the dismissed

15

Hanks Plaintiffs initiated the instant Earl action, “seeking an order from this Court declaring

16

provisions in Defendant’s arbitration agreements that purport to prohibit class or representative

17

actions, even in arbitration proceedings, are invalid pursuant to National Labor Relations Act.”

18

(Compl. ¶ 1, Earl case). The Earl Plaintiffs allege that they intend to file a class arbitration, but

19

that the American Arbitration Association requires a court order declaring such provisions

20

invalid before accepting any class arbitration claims. (Id. ¶¶ 10, 12).

21

On September 20, 2016, Plaintiffs filed the instant lawsuit seeking to overturn the

22

Court’s order in Hanks regarding the class-arbitration waiver provision in Plaintiffs’ arbitration

23

agreements. (See generally id.). Specifically, Plaintiffs seek declaratory relief that the class

24

arbitration waiver within their arbitration agreements is invalid. (Id. ¶¶ 12–13).

25

Page 2 of 5

1

B.

2

After Plaintiffs filed their Motion, the Supreme Court granted certiorari in Ernst &

The Supreme Court’s Pending Morris Decision

3

Young, LLP v. Morris, No. 16-300, 137 S. Ct. 809 (U.S. Jan. 13, 2017). The Supreme Court

4

will resolve in Morris the question of whether class-arbitration waivers are unenforceable—a

5

question that has caused a circuit split with the Ninth and Seventh holding that waivers are

6

unenforceable, and the Second, Fifth, and Eighth holding that the waivers are enforceable. See

7

Morris v. Ernst & Young, LLP, 834 F.3d 975, 984 (9th Cir. 2016); Lewis v. Epic Systems Corp.,

8

823 F.3d 1147 (7th Cir. 2016); Sutherland v. Ernst & Young LLP, 726 F.3d 290 (2d Cir. 2013);

9

Patterson v. Raymours Furniture Co., Inc., 2016 WL 4598542, (2d Cir. Sept. 2, 2016), as

10

corrected (Sept. 7, 2016), as corrected (Sept. 14, 2016); D.R. Horton, Inc. v. N.L.R.B., 737 F.3d

11

344 (5th Cir. 2013); Murphy Oil USA, Inc. v. N.L.R.B., 808 F.3d 1013, 1015 (5th Cir. 2015);

12

Cellular Sales of Missouri, LLC v. N.L.R.B., 824 F.3d 772 (8th Cir. 2016); Owen v. Bristol

13

Care, Inc., 702 F.3d 1050 (8th Cir. 2013).

14

II.

15

LEGAL STANDARD
“[T]he power to stay proceedings is incidental to the power inherent in every court to

16

control the disposition of the causes of action on its docket with economy of time and effort for

17

itself, for counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254 (1936). “A trial

18

court may, with propriety, find it is efficient for its own docket and the fairest course for the

19

parties to enter a stay of an action before it, pending resolution of independent proceedings

20

which bear upon the case.” Leyva v. Certified Grocers of Cal., Ltd., 593 F.2d 857, 863 (9th Cir.

21

1979). In deciding whether to grant a stay, a court may weigh the following: (1) the possible

22

damage which may result from the granting of a stay; (2) the hardship or inequity which a party

23

may suffer in being required to go forward; (3) the orderly course of justice measured in terms

24

of the simplifying or complicating of issues, proof, and questions of law which could be

25

expected to result from a stay. CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962).

Page 3 of 5

1

However, “[o]nly in rare circumstances will a litigant in one case be compelled to stand aside

2

while a litigant in another settles the rule of law that will define the rights of both.” Landis, 299

3

U.S. at 255. A district court’s decision to grant or deny a Landis stay is a matter of discretion.

4

See Dependable Highway Exp., Inc. v. Navigators Ins. Co., 498 F.3d 1059, 1066 (9th Cir.

5

2007).

6

III.

7

DISCUSSION
The Morris decision will directly impact whether, as a matter of law, Plaintiffs are able

8

to bring forth their claims contesting the enforceability of class-arbitration waivers.

9

Specifically, if the Supreme Court finds that class-arbitration waivers are unenforceable, then

10

Plaintiffs will be unable to pursue their desired relief in the instant action. (See Compl. ¶¶ A–

11

D).

12

Because of this, the Landis factors weigh strongly in favor of staying this action pending

13

the Morris decision. Indeed, the possible prejudice to the parties is minimal as the Morris

14

decision will likely be issued within the next year per the Supreme Court’s customary practice.

15

Additionally, the possible judicial resources also may be unnecessarily expended reviewing the

16

adequacy of the pleadings and resolving discovery disputes in a case that may be prevented

17

from moving forward based on the Supreme Court’s decision. Because the Morris decision is

18

squarely on point with what Plaintiffs seek, the orderly course of justice likewise weighs in

19

favor of a stay. Accordingly, the Court finds that staying this action until the Supreme Court

20

issues an opinion in Morris would be efficient for the Court’s own docket and the fairest course

21

for the parties. See Leyva, 593 F.2d at 863.

22

IV.

CONCLUSION

23

IT IS HEREBY ORDERED that Plaintiffs’ Motion for Summary Judgment, (ECF No.

24

5), is DENIED without prejudice with permission to renew within thirty days of the Supreme

25

Court’s decision in Morris.

Page 4 of 5

1

IT IS FURTHER ORDERED that Defendant’s Motion to Dismiss, (ECF No. 13), is

2

DENIED without prejudice with permission to renew within thirty days of the Supreme

3

Court’s decision in Morris.

4

IT IS FURTHER ORDERED that this case is STAYED pending a decision of the

5

Supreme Court in Morris. Beginning on January 7, 2018, the parties must submit a joint status

6

report updating the Court on the status of this case every ninety days.

7

8

DATED this _____ day of August, 2017.

8
9
10

___________________________________
Gloria M. Navarro, Chief Judge
United States District Judge

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

Page 5 of 5