Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Merrill v. Pathway Leasing LLC

United States District Court, D. Colorado

April 29, 2019

FRANKLIN MERRILL, et al., Plaintiffs,
v.
PATHWAY LEASING LLC, a Colorado limited liability company, MATTHEW HARRIS, an individual, Defendants.

          ORDER

          Kristen L. Mix United States Magistrate Judge

         This matter is before the Court on Plaintiffs' Motion for Reconsideration of Court's Order Dated October 5, 2017 [Dkt. 164] [#298][1] (the “Motion”). Former Defendants XPO Logistics Truckload, Inc., Transforce, Inc., and Con-way Truckoad, Inc. (collectively, “XPO”) and current Defendants Pathway Leasing LLC and Matthew Harris (collectively, the “Pathway Defendants”) filed Responses [#299, #300] in opposition to the Motion [#298], and Plaintiffs filed a Reply [#302]. The Court held a hearing on the Motion [#298] on February 21, 2019, see [#304], and ordered limited supplemental briefing. As a result, XPO filed a Supplemental Response [#310], and Plaintiffs filed a Supplemental Reply [#317]. The Court also permitted a Second Supplemental Response [#324] from XPO to address a new argument raised by Plaintiffs in their Supplemental Reply [#317]. The Court has reviewed the pertinent briefs, the entire case file, and the applicable law, and is sufficiently advised in the premises. For the reasons set forth below, the Motion [#298] is GRANTED in part.

         I. Background

         On January 10, 2017, XPO filed a Motion to Dismiss and Compel Individual Arbitrations [#94] (the “Motion to Compel”). On October 5, 2017, the Court granted the Motion to Compel to the extent that Plaintiffs were “compelled to submit their individual claims against these three Defendants to arbitration pursuant to the arbitration provision of the Agreement.” Order [#164] at 10. The claims against XPO were thus dismissed without prejudice. Id. at 11. At that time, the Court noted:

Typically, claims that are sent to arbitration are stayed. See, e.g., Urbanic v. Travelers Ins., No. 10-cv-02368-WYD-MJW, 2011 WL 1743412, at *10 (D. Colo. May 6, 2011). However, the Court is aware of no authority that mandates a stay. Here, Defendants have moved to dismiss Claims One and Five in order to compel arbitration and Plaintiffs have not raised any arguments in the alternative that the claims should be stayed.

Id. at 11 n.5. On January 17, 2019, Plaintiffs filed the present Motion [#298], asking the Court to reconsider its prior Order [#164] on the basis of the United States Supreme Court opinion in New Prime Inc. v. Oliveira, 139 S.Ct. 532 (2019), issued on January 15, 2019.

         II. Legal Standard

         A motion for reconsideration “is an extreme remedy to be granted in rare circumstances.” Brumark Corp. v. Samson Res. Corp., 57 F.3d 941, 944 (10th Cir. 1995). It is well-established in the Tenth Circuit that grounds for a motion to reconsider are limited to the following: “(1) an intervening change in the controlling law; (2) new evidence previously unavailable; and (3) the need to correct clear error or prevent manifest injustice.” Servants of Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir. 2000) (citing Brumark, 57 F.3d at 948). Therefore, a motion to reconsider is “appropriate [only] where the court has misapprehended the facts, a party's position, or the controlling law.” Id. Here, Plaintiffs base their Motion [#298] on the first ground, i.e., an intervening change in the controlling law.

         III. Analysis

         “The Federal Arbitration Act [(“FAA”)] requires courts to enforce private arbitration agreements.” New Prime, Inc., 139 S.Ct. at 536. “But like most laws, this one bears its qualifications.” Id. “Among other things, [9 U.S.C.] § 1 says that ‘nothing herein' may be used to compel arbitration in disputes involving the ‘contracts of employment' of certain transportation workers.” Id. “While a court's authority under the Arbitration Act to compel arbitration may be considerable, it isn't unconditional.” Id. at 537. “If two parties agree to arbitrate future disputes between them and one side later seeks to evade the deal, [9 U.S.C.] §§ 3 and 4 of the Act often require a court to stay litigation and compel arbitration ‘accord[ing to] the terms of the parties' agreement.” Id. “But this authority doesn't extend to all private contracts, no matter how emphatically they may express a preference for arbitration.” Id. “Instead, antecedent statutory provisions limit the scope of the court's powers under §§ 3 and 4.” Id. “Section 2 provides that the Act applies only when the parties' agreement to arbitrate is set forth as a ‘written provision in any maritime transaction or a contract evidencing a transaction involving commerce.'” Id. “And § 1 helps define § 2's terms.” Id. “Most relevant for our purposes, § 1 warns that ‘nothing' in the Act ‘shall apply' to ‘contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.'” Id. “[T]o invoke its statutory powers under §§ 3 and 4 to stay litigation and compel arbitration according to a contract's terms, a court must first know whether the contract itself falls within or beyond the boundaries of §§ 1 and 2.” Id. “The parties' private agreement may be crystal clear and require arbitration of every question under the sun, but that does not necessarily mean the Act authorizes a court to stay litigation and send the parties to an arbitral forum.” Id. at 537-38.

         Both New Prime and the present case involve drivers working for an interstate trucking company. After New Prime, it appears indisputable that the Court was without authority under the FAA to order Plaintiffs and XPO to arbitration; indeed, neither party argues otherwise. See generally Motion [#298]; Response [#299, #300]. Ultimately, the Supreme Court held that (1) “a court should decide for itself whether § 1's ‘contracts of employment' exclusion applies before ordering arbitration” and (2) the statutory phrase “contracts of employment” includes both employee-employer relationships as well as independent contractor relationships. Id. at 537, 543. These holdings call into question the Court's October 5, 2017 Order [#164] dismissing XPO pursuant to the FAA on the basis of the arbitration agreements between Plaintiffs and XPO. Applying the New Prime holdings here, the Court finds that, pursuant to § 1 of the FAA, Plaintiffs, as interstate truck drivers, may not be compelled to arbitration pursuant to the FAA regardless of their status as either employees or independent contractors. See also Id. at 543-544 (holding that the interstate truck driver plaintiff's agreement with his company defendant fell within the § 1 exclusion).

         Thus, Plaintiffs are correct that the Court was without authority to direct Plaintiffs and XPO to arbitration pursuant to the FAA. Indeed, XPO does not contend that the Court would have reached the same decision expressed in the October 5, 2017 Order pursuant to the FAA had the New Prime decision been available then. See Response [#299]; Supp. Response [#310]; see also Pathway's Response [#300]. However, XPO argues why, regardless of New Prime, the same result is mandated, i.e., that XPO should be dismissed from this lawsuit in favor of arbitration.[2] The Court first addresses XPO's argument that the Court's Order [#164] is supported on the alternative basis that arbitration may be compelled under Missouri state law via the Missouri Uniform Arbitration Act (“MUAA”). See Supp. Response [#310] at 8-12.

         A. Preemption

         The parties contest whether the FAA fully preempts the MUAA in this case. Supp. Response [#310] at 8-12; Supp. Reply [#317] at 1-5.

         First, the Court notes that Plaintiffs argue that New Prime “clarified that federal policy in favor of enforcing valid arbitration contracts also embodies a policy of not enforcing arbitration agreements in the context of the FAA's Section One exclusions.” Supp. Reply [#317] at 2 (emphasis in original). The Court disagrees with this assessment of New Prime. In fact, the Supreme Court explicitly stated in New Prime that it had “granted certiorari only to resolve existing confusion about the application of the Arbitration Act, not to explore other potential avenues for reaching a destination it does not.” 139 S.Ct. at 543 (emphasis added). In other words, the Supreme Court left open the possibility that a truck driver working for an interstate trucking company suing under the FLSA who had signed an arbitration agreement could still be compelled to arbitration, but merely held that the FAA did not provide the authority to do so. See also Id. at 537 (“While a court's authority under the Arbitration Act to compel arbitration may be considerable, it isn't unconditional. . . .

         [T]his authority doesn't extend to all private contracts . . . .” (first emphasis added) (second emphasis in original)). In Volt Information Sciences v. Board of Trustees of Leland Stanford University, 489 U.S. 468, 472 (1989), the United States Supreme Court had previously ruled that “[w]here, as here, the parties have chosen in their agreement to abide by the state rules of arbitration, application of the FAA to prevent enforcement of those rules would actually be inimical to the policies underlying state and federal arbitration law.” Id. at 472 (internal citations and quotation marks omitted). Nothing in New Prime overturns that prior decision. Thus, the Court finds that New Prime does not, as Plaintiffs contend, provide authority supporting an inverse “policy of not enforcing arbitration agreements in the context of the FAA's Section One exclusions.” Supp. Reply [#317] at 2 (emphasis in original).

         Therefore, the question becomes whether the Court's Order [#164] is supported by authority outside of the FAA. XPO contends that this authority exists through Plaintiffs' and XPO's agreements to submit to binding arbitration under the MUAA. Supp. Response [#310] at 4. The Court agrees that the relevant contract language is clear that Missouri's state arbitration laws shall apply ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.