Cobble v. 20/20 Communications, Inc. (TV1)

Filing 85

MEMORANDUM OPINION AND ORDER; the Court hereby GRANTS defendant's Motion to Stay Briefing and Adjudication of Plaintiff's Motion for Conditional Certification 78 . It is thus ORDERED that briefing and adjudication of p laintiff's Expedited Motion to Conditionally Certify Collective Action and Facilitate Notice to Potential Opt-in Plaintiffs 71 is STAYED until the Court rules on defendant's pending motions to dismiss or transfer venue 5 , 46 . Signed by Chief District Judge Thomas A. Varlan on 10/11/17. (ADA)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
JAMES COBBLE, et al.,
Plaintiffs,
v.
20/20 COMMUNICATIONS, INC.,
Defendant.

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No.:

2:17-CV-53-TAV-MCLC

MEMORANDUM OPINION AND ORDER
This civil action is before the Court on defendant’s Motion to Stay Briefing and
Adjudication of Plaintiff’s Motion for Conditional Certification [Doc. 78]. In this motion,
defendant moves the Court to stay briefing and adjudication of plaintiff James Cobble’s
Expedited Motion to Conditionally Certify Collective Action and Facilitate Notice to
Potential Opt-in Plaintiffs [Doc. 71], pending resolution of defendant’s motions to dismiss,
transfer venue, or transfer the opt-in claims [Docs. 5, 46]. Plaintiff responded in opposition
to defendant’s motion to stay [Doc. 83], and defendant filed a reply [Doc. 84]. After
carefully considering the matter, the Court will grant defendant’s motion to stay.
I.

Background
This case concerns allegations of unpaid overtime wages under the federal Fair

Labor Standards Act (the “FLSA”), 29 U.S.C. §§ 201–19. Plaintiff James Cobble seeks to
represent all similarly situated Field Sales Managers whom defendant employed in the past
three years to service its account with Samsung Electronics America, Inc., and to whom it

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allegedly failed to properly pay overtime wages [Doc. 1 ¶¶ 1–2]. Plaintiff1 originally filed
a demand for arbitration with the American Arbitration Association (“AAA”), seeking the
same relief [Doc. 6-1]. After that proceeding had remained pending for almost a year,
however, plaintiff withdrew his arbitration demand and filed a complaint for monetary,
injunctive, and declaratory relief in this Court [Doc. 1]. The complaint asserts that
defendant employed hundreds of Field Sales Managers who worked over forty hours per
week yet did not receive sufficient overtime pay [Id. ¶¶ 28–29].
Defendant responded by moving the Court to dismiss plaintiff’s complaint and
compel arbitration or, in the alternative, to transfer this action to the United States District
Court for the Northern District of Texas [Doc. 5]. In support of this motion, defendant
asserted that, as a condition of employment, all Field Sales Managers had signed a Mutual
Arbitration Agreement (“MAA”), which required the parties to submit all non-excepted
disputes to arbitration and which contained a class action waiver [Doc. 6 pp. 2–3].
Defendant also noted that, even if no enforceable arbitration agreement existed, plaintiff’s
employment agreement contained a forum-selection clause fixing venue in Tarrant County,
Texas [Id. at 13]. Plaintiff responded that he never signed an MAA or forum-selection
clause, noting that defendant has been unable to produce the original, signed agreement

1

Although multiple other opt-in plaintiffs have now joined this action, the Court will refer
to plaintiff Cobble simply as “plaintiff” for the purpose of brevity.
2

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[Doc. 16 pp. 5–7].2 Moreover, plaintiff has argued that the MAA would be unenforceable
under controlling Sixth Circuit precedent to the extent it contains a class action waiver
[Doc. 83 p. 1 (citing NLRB v. Alt. Entm’t, Inc., 858 F.3d 393 (6th Cir. 2017))].
On July 3, 2017, defendant filed a motion to transfer the claims of all but one optin plaintiff to the Northern District of Texas on the ground that the Court lacks personal
jurisdiction over these claims [Doc. 46].3 Defendant later moved for a stay of discovery
pending a ruling on its motions to dismiss or transfer venue [Doc. 55]. Then, on August
18, 2017, plaintiff moved the Court to conditionally certify this matter as a collective action
and to order sending notice to potential opt-in plaintiffs, pursuant to 29 U.S.C. § 216(b)
[Doc. 71]. The Court referred these motions to Magistrate Judge Clifton L. Corker for his
consideration [Docs. 58, 76–77]. These motions remain pending before Magistrate Judge
Corker as of the date of entry of this opinion.
Finally, on August 31, 2017, defendant moved for a stay of briefing and adjudication
of plaintiff’s conditional certification motion [Doc. 78]. Defendant submits that, in the
interests of judicial economy and preservation of party resources, the Court should defer
ruling on plaintiff’s motion until it has ruled on defendant’s motions to dismiss or transfer

2

Defendant has explained that the original image of plaintiff’s electronic employment
agreement, which contained the MAA he executed, was lost after defendant’s business relationship
with its former onboarding-software vendor, Enwisen, ended [Doc. 6 p. 2 n.2]. Defendant asserts,
however, that it has produced uncontroverted evidence that plaintiff could not have completed the
hiring process without executing the agreement, given the nature of the onboarding software in
use at the time his employment began [Id. (citing Doc. 6-3 ¶ 13 (deposition of Chian Burks))].
3

Defendant later filed a supplemental motion seeking the same relief with regard to
additional opt-in plaintiffs who had joined the suit in the interim [Doc. 66].
3

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venue [Doc. 79 p. 2]. Plaintiff responded in opposition [Doc. 83], and defendant replied
[Doc. 84]. Defendant’s motion to stay is thus fully briefed and ready for disposition.
II.

Analysis
The Court will first determine the standard of review it must apply in considering

defendant’s motion to stay. The Court will then determine, in light of that standard, which
of the various motions pending before the Court should receive priority consideration and
whether defendant’s requested stay is warranted.
A.

Determining the Proper Standard of Review

First, defendant submits that a stay of briefing and adjudication of plaintiff’s
conditional certification motion is appropriate, based on principles of judicial economy
[Doc. 79 p. 2]. Plaintiff responds that, under applicable Sixth Circuit precedent, the
proponent of a stay must show that it will suffer irreparable injury absent a stay and that its
opponent will not suffer any injury if a stay is entered [Doc. 83 pp. 2–3]. Plaintiff argues
that defendant has made no such showing.
A district court generally “has broad discretion to stay proceedings as an incident to
its power to control its own docket.” Clinton v. Jones, 520 U.S. 681, 706 (1997) (citing
Landis v. N. Am. Co., 299 U.S. 248, 254 (1936)); see also FTC v. E.M.A. Nationwide, Inc.,
767 F.3d 611, 626–27 (6th Cir. 2014) (“The power to stay proceedings is incidental to the
power inherent in every court to control the disposition of the causes in its docket with
economy of time and effort for itself, for counsel and for litigants . . . .” (quoting Ohio
Envtl. Council v. U.S. Dist. Court, S. Dist. of Ohio, E. Div., 565 F.2d 393, 396 (6th Cir.
4

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1977))). On the other hand, courts “must tread carefully in granting a stay of proceedings,
since a party has a right to a determination of its rights and liabilities without undue delay.”
Ohio Envtl. Council, 565 F.2d at 396. Thus, when a party seeks a stay of proceedings in a
case, that party bears the burden of proving “that it will suffer irreparable injury if the case
moves forward, and that the non-moving party will not be injured by a stay.” Int’l Bhd. of
Elec. Workers, Local Union No. 2020 v. AT&T Network Sys., 879 F.2d 864, at *8 (6th Cir.
1989) (table opinion). The court must also consider whether the requested stay will
“further the interest in economical use of judicial time and resources.” Id.
Plaintiff asserts that the standard described above for granting a stay of proceedings
governs defendant’s motion.4 The Court disagrees. While judicial economy and prejudice
to the parties are certainly relevant considerations in any stay analysis, the cases cited above
concerned a litigant’s motion for a stay of all proceedings pending some other event. See,
e.g., Clinton, 520 U.S. at 707–08 (overturning stay of lawsuit against President Clinton
until his term of office expired); E.M.A. Nationwide, Inc., 767 F.3d at 628–29 (affirming
denial of stay pending resolution of criminal proceedings); Int’l Bhd. of Elec. Workers, 879
F.2d 864, at *8–9 (affirming denial of stay pending resolution of separate class action).
Here, by contrast, defendant has requested only a stay of briefing and adjudication of one
motion in a case that may otherwise proceed before this Court [Doc. 78].
While courts have yet to define a precise standard to apply to such a request, a
review of the case law from this circuit suggests that courts do not require an affirmative

4

Defendant’s reply brief does not address the proper standard of review [See Doc. 84].
5

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showing of irreparable harm when considering such a motion. See, e.g., Holmes v. Kelly
Servs. USA, LLC, No. 16-cv-13164, 2017 WL 1077987, at *3 (E.D. Mich. Mar. 22, 2017);
In re Amazon.com, Inc., Fulfillment Ctr. FLSA & Wage & Hour Litig., No. 3:14-md-2504,
2016 WL 8203223, at *1 (W.D. Ky. Apr. 22, 2016); Price v. Medicaid Dir., No. 1:13-cv74, 2016 WL 8201769, at *2 (S.D. Ohio Feb. 1, 2016); Shannon v. PNC Bank, N.A., No.
3:14-cv-421, 2015 WL 339577, at *2 (W.D. Ky. Jan. 26, 2015); New Jerusalem
Deliverance Church v. Rabette, No. 10-12566, 2011 WL 587145, at *1 (E.D. Mich. Feb.
10, 2011); Ford Motor Co. v. United States, No. 08-12960, 2009 WL 2776881, at *1 (E.D.
Mich. Aug. 27, 2009). Rather, courts exercise their broad discretion in “balancing the
‘competing interests’” of the parties, Holmes, 2017 WL 1077987, at *3 (quoting Landis,
299 U.S. at 254), with the Court’s duty to promote judicial economy and efficiently manage
its docket, see Price, 2016 WL 8201769, at *2. Indeed, the “interest of judicial efficiency”
is the overriding consideration in these circumstances because determining the order in
which particular matters will be addressed in litigation is a quintessential prerogative of the
trial court. See In re Amazon.com Litig., 2016 WL 8203223, at *1.
B.

The Priority of the Parties’ Various Motions

Second, having described the proper standard to apply in considering defendant’s
motion to stay, the Court turns to a determination of which motions—plaintiff’s motion for
conditional certification or defendant’s motions to dismiss or transfer venue—should
receive priority consideration. For the reasons set out below, the Court finds that principles

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of judicial economy require the Court to consider defendant’s motions before deciding
whether to conditionally certify this matter as a collective action.
The Federal Arbitration Act (“FAA”) provides that a written arbitration provision
in a 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. The FAA expresses
“a strong public policy favoring arbitration of a wide class of disputes.” Cooper v. MRM
Inv. Co., 367 F.3d 493, 498 (6th Cir. 2004). The FAA also empowers the federal district
courts to enter an order compelling arbitration and staying any pending federal proceedings
“upon being satisfied that the issue involved in such suit or proceeding is referable to
arbitration under such an agreement.” 9 U.S.C. §§ 3–4; see also Fazio v. Lehman Bros.,
340 F.3d 386, 392 (6th Cir. 2003) (“If a court determines that the cause of action is covered
by an arbitration clause, it must stay the proceedings until the arbitration process is
complete.” (emphasis added)). Given the strong federal policy favoring arbitration, the
Supreme Court has cautioned that the FAA “calls for a summary and speedy disposition of
motions or petitions to enforce arbitration clauses.” Moses H. Cone Mem’l Hosp. v.
Mercury Constr. Corp., 460 U.S. 1, 9 (1983).
Defendant argues that federal courts frequently defer consideration of a motion for
conditional collective-action certification until a pending motion to compel arbitration is
resolved. Defendant relies first and foremost on Doe #1 v. Déjà Vu Consulting Inc., in
which the Middle District of Tennessee held that “the question of arbitrability is a threshold
issue that must be addressed before [a conditional certification motion].” No. 3:17-cv-40,
7

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2017 WL 3837730, at *7 (M.D. Tenn. Sept. 1, 2017). The court further found that, “when
a motion for conditional certification and a motion to compel arbitration are both pending
before a district court, courts generally consider the motion to compel arbitration first and,
then, if the motion to compel is denied, whether conditional certification is appropriate.”
Id. at *8. Defendant cites to other decisions where courts have followed this pattern, albeit
usually without discussing the issue of priority in detail. See, e.g., Davis v. Vanguard Home
Care, LLC, No. 16-cv-7277, 2016 WL 7049069, at *1 (N.D. Ill. Dec. 5, 2016); Feamster
v. Compucom Sys., Inc., No. 7:15-cv-564, 2016 WL 722190, at *4–5 (W.D. Va. Feb. 19,
2016); Pollock v. Legends Hospitality, LLC, No. 12 Civ. 8334, 2013 WL 3863864, at *1
(S.D.N.Y. July 25, 2013); Withrow v. Sedgwick Claims Mgmt. Serv., Inc., 841 F. Supp. 2d
972, 987–88 (S.D.W. Va. 2012); Darrow v. WKRP Mgmt., LLC, No. 9-cv-1613, 2011 WL
1666817, at *2 (D. Colo. May 2, 2011).5 Ultimately, defendant argues that litigating class
certification before resolving the arbitrability issue would undermine the purpose of the
MAA and would waste judicial and litigant resources.
Plaintiff responds that courts routinely deny motions like the one defendant has filed
here. Plaintiff relies principally on Lewis v. Nevada Property 1, LLC, where a magistrate
judge declined to defer ruling on a conditional certification motion pending the district
judge’s ruling on the motion to dismiss. No. 2:12-cv-1564, 2013 WL 237098, at *14 (D.
Nev. Jan. 22, 2013). The court noted that the FLSA’s two-year statute of limitations might

5

Defendant also cites decisions where the court addressed and denied an arbitration motion
first before then turning to a conditional certification motion. See, e.g., Gaffers v. Kelly Servs.,
Inc., 203 F. Supp. 3d 829, 835–45 (E.D. Mich. 2016).
8

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run on the claims of some opt-in plaintiffs while the district judge was considering the
motion to dismiss. Id. (citing 29 U.S.C. § 255(a)). The court further observed that,
“[a]lthough the sending of notice is burdensome, the burden falls primarily on the
[p]laintiff and her counsel who will bear the expense of sending notice.” Id. Likewise,
plaintiff here argues that delaying sending notice will cause plaintiff severe prejudice as
the claims of unknown opt-in plaintiffs continue to “die daily,” while defendant has shown
no real harm it will suffer absent a stay. See McKinley v. Genghis Grill, No. 17-2408-JPMtmp, 2017 U.S. Dist. LEXIS 138479, at *4 (W.D. Tenn. Aug. 11, 2017) (“Briefing the issue
of class certification is not a meaningful injury . . . .”). Plaintiff submits that the cases cited
by defendant are distinguishable and that other courts have denied the relief defendant
seeks. E.g., McKinley, 2017 U.S. Dist. LEXIS 138479, at *4–5; Brown v. Citicorp Credit
Servs., Inc., No. 1:12-CV-62, 2013 WL 1760267, at *5 (D. Idaho Apr. 24, 2013).
After carefully considering the authorities cited and arguments advanced by both
parties, the Court finds that, in the interest of judicial efficiency, it must defer consideration
of plaintiff’s conditional certification motion until it has ruled on defendant’s motions to
dismiss or transfer venue. First, the Court is mindful of its obligation under the FAA to
provide a “summary and speedy disposition” of defendant’s motion to dismiss and compel
arbitration. Moses H. Cone Mem’l Hosp., 460 U.S. at 9. The Court also notes that a finding
of arbitrability would be dispositive of the case, as the FAA would then direct the Court to
“stay the proceedings until the arbitration process is complete.” Fazio, 340 F.3d at 392.
By contrast, a ruling on plaintiff’s conditional certification motion would, one way or the
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other, permit these proceedings to continue. Thus, the “interest of judicial efficiency”
speaks to the need to address the issue of arbitration before the issue of collective-action
certification. See In re Amazon.com Litig., 2016 WL 8203223, at *1. Furthermore, the
Court agrees with the Middle District of Tennessee that most courts faced with this issue
have elected to address arbitration motions before conditional certification motions. Doe
#1, 2017 WL 3837730, at *8. This pattern is sensible—when faced with dueling motions
to dismiss or greatly expand an action, the need to most efficiently use litigant and court
resources counsels in favor of first addressing the former.
The Court also agrees with defendant that the cases on which plaintiff relies are
distinguishable. McKinley concerned not a stay of briefing of a single motion, but rather a
request to stay all proceedings until the Supreme Court issues a ruling in three FLSA cases6
in which it has recently granted certiorari. 2017 U.S. Dist. LEXIS 138479, at *3. Thus,
the higher burden attending a request for a total stay applied, Int’l Bhd. of Elec. Workers,
879 F.2d 864, at *8, and the delay from awaiting the Supreme Court’s rulings would likely
be much longer. Similarly, Brown concerned a request for a total stay pending an
interlocutory appeal after the court had already denied the defendant’s arbitration motion.
2013 WL 1760267, at *1. And plaintiff’s reliance on Gaffers is misplaced because the
court there actually ruled on the arbitration motion first, and only after denying it on the
merits did the court turn to the issue of conditional certification. 203 F. Supp. 3d at 842.

6

Epic Sys. Corp. v. Lewis, 137 S. Ct. 809 (2017); Ernst & Young LLP v. Morris, 137 S. Ct.
809 (2017); NLRB v. Murphy Oil USA, Inc., 137 S. Ct. 809 (2017).
10

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Finally, Lewis did not deal with an arbitration motion at all, but rather with a motion to
dismiss under the Colorado River doctrine. 2013 WL 237098, at *12. Hence, concerns
about the need for a “summary and speedy disposition” under the FAA were absent. Moses
H. Cone Mem’l Hosp., 460 U.S. at 9.
On the other hand, the Court is cognizant of plaintiff’s concern that any delay in
ruling on his conditional certification motion may result in the statute of limitations running
on the claims of potential opt-in plaintiffs. The Court finds, however, that this argument
is ultimately unpersuasive. For the reasons discussed above regarding the need to address
arbitration and other dispositive issues promptly, the Court plans to prioritize ruling on
defendant’s motions to dismiss or transfer venue regardless of whether a stay is entered.
Thus, the Court’s ruling on the instant motion will affect only whether the parties continue
to brief plaintiff’s conditional certification motion, not the order in which the various
pending motions are resolved. Furthermore, while plaintiff is correct that most of the
expense of sending notice would fall on his shoulders, Lewis, 2013 WL 237098, at *14,
“[t]he burden of resisting conditional certification is not insubstantial, and the
consequences of conditional certification of this case as a collective action may be
significant,” Darrow, 2011 WL 1666817, at *2. Moreover, potential opt-in plaintiffs are
not left simply at the mercy of the statute of limitations in the time before the Court rules
on plaintiff’s motion. After all, “any potential class members who are aware of this action
can move to intervene. Those not aware of the action but who believe they have a claim
against [defendant] may commence an independent action.” Id.
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Thus, the court finds that both the competing interests of the parties and the need to
foster judicial efficiency favor the stay defendant has requested.
III.

Conclusion
For the reasons described above, the Court hereby GRANTS defendant’s Motion

to Stay Briefing and Adjudication of Plaintiff’s Motion for Conditional Certification [Doc.
78]. It is thus ORDERED that briefing and adjudication of plaintiff’s Expedited Motion
to Conditionally Certify Collective Action and Facilitate Notice to Potential Opt-in
Plaintiffs [Doc. 71] is STAYED until the Court rules on defendant’s pending motions to
dismiss or transfer venue [Docs. 5, 46].
IT IS SO ORDERED.

s/ Thomas A. Varlan
CHIEF UNITED STATES DISTRICT JUDGE

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