Tennessee Tractor, LLC on behalf of itself and the Tennessee Tractor, LLC Health and Welfare Benefit Plan et al v. WH Adminstrators, Inc.
Filing
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ORDER DENYING DEFENDANTS 64 MOTION FOR STAY WITHOUT PREJUDICE. Signed by Chief Judge S. Thomas Anderson on 5/25/18. (mbm)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
EASTERN DIVISION
______________________________________________________________________________
KERRY YOUNG, on behalf of
himself and all similarly situated
persons,
)
)
)
)
Plaintiff,
)
)
vs.
)
No. 1:17-cv-02829-STA-egb
)
WH ADMINISTRATORS, INC.,
)
)
Defendant.
)
______________________________________________________________________________
ORDER DENYING DEFENDANT’S MOTION FOR STAY WITHOUT PREJUDICE
______________________________________________________________________________
Before the Court is Defendant’s Motion to Stay (ECF No. 64) these proceedings in light
of the filing of a second lawsuit against Defendant by the United States Department of Labor
raising facts substantially similar to those in this suit. For reasons set forth below, the instant
Motion is hereby DENIED without prejudice.
BACKGROUND
On November 10, 2017, Plaintiffs Tennessee Tractor, LLC, and Kerry Young, on behalf
of himself and all similarly situated persons, filed a class-action Complaint (ECF No. 1) under
the Employee Retirement Income Security Act (“ERISA”) against Defendant WH
Administrators, Inc.
On November 27, 2017, Plaintiffs filed a still-pending Motion for
Preliminary Injunction (ECF No. 10). On December 4, 2017, Defendant filed a Motion to
Compel Arbitration (ECF No. 14). Then on December 11, 2017, Plaintiffs filed an Amended
Complaint (ECF No. 22), resulting in Defendants’ re-filed Motion to Compel Arbitration (ECF
No. 24). After the parties filed a Response (ECF No. 25), a Reply (ECF No. 30), and a Sur-
Reply (ECF No. 34), the Court granted Defendant’s Motion to Compel Arbitration in Part (ECF
No. 44) and compelled Tennessee Tractor to take its claims against Defendant to arbitration.
Defendant sought reconsideration of its Motion as to Kerry Young and the other class Plaintiffs
(ECF No. 46), which the Court denied in its April 13, 2018 Order (ECF No. 49).
On May 4, 2018, Plaintiff1 filed a Motion for Leave to Supplement (ECF No. 59) the
Motion for Preliminary Injunction with information concerning the filing of a lawsuit by the
United States Department of Labor against WHA in the United States District Court of Maryland
on May 2, 2018. The Court granted that Motion (ECF No. 61). The parties seem to be in
agreement that the Department of Labor makes allegations against Defendant that are
substantially similar to those made by Plaintiff.
In addition to Plaintiff’s pending Motion for Preliminary Injunction, Defendant has filed
a Motion to Dismiss (ECF No. 60), the instant Motion to Stay, and a Motion to Quash (ECF No.
67). This Order is solely concerned with the Motion to Stay. Upon the consultation of counsel
for this Motion, Plaintiff indicated his opposition but has not yet filed a memorandum. The time
for Plaintiff to file has not yet expired, but since the Court agrees with Plaintiff’s position,
Plaintiff will suffer no prejudice in not being afforded an opportunity to respond.
DISCUSSION
Defendant asks the Court to exercise its discretion and stay this action pending resolution
of the Department of Labor’s suit against Defendant. “[T]he 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 . . . .” Ohio Envtl.
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The Court will hereafter refer to Kerry Young and the class members simply as
“Plaintiff,” using Mr. Young as a stand-in for the rest of the class.
2
Council v. U.S. District Court, 565 F.2d 393, 396 (6th Cir. 1977) (quoting Landis v. N. Am. Co.,
299 U.S. 248, 254–55 (1936)). “[A]nd . . . the entry of such an order ordinarily rests with the
sound discretion of the District Court.” Id. “[A] court 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.” Id. The party seeking
a stay must make out a clear case of hardship or inequity in being required to go
forward, if there is even a fair possibility that the stay for which he prays will
work damage to someone else. Only in rare circumstances will a litigant in one
cause be compelled to stand aside while a litigant in another settles the rule of law
that will define the rights of both.
Landis, 299 U.S. at 255. “Thus the burden is on the party seeking the stay to show that there is
pressing need for delay, and that neither the other party nor the public will suffer harm from
entry of the order.” Ohio Envtl. Council, 565 F.2d at 396. In the supporting memorandum
incorporated into its Motion, Defendant writes that
a district court generally considers (1) “any prejudice to the non-moving party if a
stay is granted,” (2) “any prejudice to the moving party if a stay is not granted,”
and (3) “the extent to which judicial economy and efficiency would be served by
the entry of a stay.”
Def. WH Admins., Inc.’s Mot. to Stay, at 2, May 14, 2018, ECF No. 64 (quoting Voeltner v.
Gen. Elec. Co., 2007 U.S. Dist. LEXIS 92254, at *2 (S.D. Ohio Dec. 4, 2007)) (citations
omitted).
While these factors have not calcified into a controlling standard, the Court
nonetheless finds them instructive as it considers Defendant’s Motion.
Defendant argues that (1) a stay would not be prejudicial to Plaintiff, (2) failure to stay
this matter would be prejudicial to Defendant, and (3) a stay would serve the interests of judicial
efficiency and economy. To the first point, Defendant asserts that there is no risk of dissipation
of assets, such as Plaintiff is concerned about, because the relevant plan trust account only has
$263.44, and Defendant does not have control over those funds. To the second point, Defendant
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submits that it will suffer prejudice by being forced to defend itself in two different courts over
the same subject matter. Finally, Defendant offers that a stay will serve judicial economy
because, depending upon the outcome of the case involving the Department of Labor, this Court
may have no need to review the pending Motions or the underlying merits of the case.
The Court is not convinced. At this early stage of the proceedings—an early stage more
than six months into the case despite or perhaps because of the high degree of activity by the
parties—the Court is forced to give substantial weight to the harm that Plaintiff alleges it will
suffer if its Motion for Preliminary Injunction is not granted. Pls.’ Mem. of Law in Supp. of
Rule 65(a) Mot. for Prelim. Inj., at 8, Nov. 27, 2017, ECF No. 10-1 (“If WHA is successful
in . . . dissipating the Plan assets, any judgment obtained against WHA by the Plaintiffs shall be
rendered worthless. . . . The failure of WHA to pay the claims of the Plan participants has created
a host of debt collection issues that are causing, and will continue to cause, substantial harm and
hardship to the Plaintiffs.”). The Sixth Circuit and Supreme Court have made clear that it is a
heavy burden that must be met for a party’s rights to be resolved without his participation. And
the Court is not satisfied that the burden has been met in this instance. The Court is not
persuaded that either the fact that Defendant must participate in two lawsuits or that judicial
efforts may be duplicated to some extent outweighs the potential prejudice to Plaintiff if this
action is stayed.
CONCLUSION
For the foregoing reasons, the instant Motion is DENIED without prejudice.
IT IS SO ORDERED.
s/ S. Thomas Anderson
S. THOMAS ANDERSON
CHIEF UNITED STATES DISTRICT JUDGE
Date: May 25, 2018.
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