Bonner v. Mich. Logistics Inc.
Decision Date | 20 April 2017 |
Docket Number | No. CV-16-03662-PHX-GMS.,CV-16-03662-PHX-GMS. |
Citation | 250 F.Supp.3d 388 |
Parties | Xavier BONNER, et al., Plaintiffs, v. MICHIGAN LOGISTICS INCORPORATED, et al., Defendants. |
Court | U.S. District Court — District of Arizona |
Daniel Lee Bonnett, Evan Robert Browne Schlack, Susan Joan Martin, Martin & Bonnett PLLC, Phoenix, AZ, Marijana Frances Matura, Troy Lane Kessler, Shulman Kessler LLP, Melville, NY, for Plaintiffs.
Heather Fox Vickles, Matthew McKinley Morrison, Sherman & Howard LLC, Denver, CO, John Alan Doran, Sherman & Howard LLC, Michelle Ray Matheson, Matheson & Matheson PLC, Scottsdale, AZ, Sharon P. Stiller, Formato Ferrera & Wolf LLP, Rochester, NY, for Defendants.
Pending before the Court is the Motion to Compel Individual Arbitration and Stay Proceedings of Defendants Arizona Logistics LLC, Michigan Logistics Incorporated, and Parts Authority Arizona LLC, (Doc. 28).1 For the following reasons, the Court grants the motion in part and denies the motion in part.
Defendants Arizona Logistics LLC ("Arizona Logistics") and Michigan Logistics Incorporated ("Michigan Logistics") both do business under the name of Diligent Delivery Systems ("Diligent"). (Doc. 1 at 6–7, Doc. 28–1 at 1.) They are affiliated companies and the same person, Larry Browne, is the CEO of both. (Doc. 28–1 at 1.) Mr. Browne, in a declaration attached to the pending Motion, characterized Arizona Logistics' business model as follows:
Arizona Logistics is a delivery logistics company. It does not perform any deliveries, employ any delivery drivers, or own any delivery vehicles. Instead, it locates customers who need an outside delivery service, and then offers to connect those customers with independent delivery providers ("owner-operators") willing to provide such a service. Arizona Logistics, therefore, acts as a broker by offering a customer's delivery opportunity to an owner-operator and, if the owner-operator accepts, connecting the customer and the owner-operator.
The Plaintiffs in this action are individuals who contracted with Arizona Logistics to serve as delivery drivers. Each signed an Owner Operator Agreement, ("Agreement"), which formed the basis for the contractual relationship between Arizona Logistics and each driver. Each Plaintiff performed deliveries on behalf of Arizona Logistics' customer, Parts Authority Arizona LLC ("Parts Authority"), which runs a chain of automotive parts shops in Arizona. Each Owner Operator Agreement,2 consistent with Mr. Browne's description of Arizona Logistics' business model, emphasized that the delivery drivers were independent "Owner Operators" and not employees of Arizona Logistics. (Doc. 28–2 at 1, Doc. 28–7 at 1.) Plaintiffs allege, however, that Arizona Logistics, Michigan Logistics and Parts Authority "formed a joint employment relationship with respect to Plaintiffs," and that they "constitute a unified operation," "a common enterprise," have "common management," "centralized control of labor relations," "common ownership" and constitute "a single employer" and an "integrated enterprise." (Doc. 1 at 9–10).
Plaintiffs allege that Defendants "knowingly misclassified" them as independent contractors, rather than employees. (Doc. 1 at 2–3.) By doing this, Plaintiffs allege, Defendants were able to avoid paying statutorily mandated minimum and overtime wages, shift business expenses to Plaintiffs, avoid payroll taxes and benefits, and obtain an unfair competitive advantage in the marketplace. (Id. ) Plaintiffs bring individual and class claims under the Fair Labor Standards Act ("FLSA") and Arizona's Wage Act, and on a theory of restitution/unjust enrichment.3 (Id. at 12–26.)
Defendants bring this Motion to Compel based on Alternative Dispute Resolution ("ADR") provisions included in the Owner Operator Agreements. The Agreements signed by Plaintiffs Bonner, Ross, Williams and Harris4 included a four-page provision entitled "Dispute Resolution," which provided in part that:
(Doc. 28–2 at 7–9.) The ADR provision in Plaintiff Six's Agreement, by contrast, says only the following:
DILIGENT and Operator both agree to resolve any disputes between DILIGENT and Operator directly or with an agreed form of Alternative Dispute Resolution. Both DILIGENT and Operator agree that neither will engage or participate in a collective or class suit against the other.
Defendants ask the Court to compel arbitration and stay further proceedings based on these contractual provisions.
Under the Federal Arbitration Act ("FAA"), "[a] written provision in ... a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, ... shall be valid, irrevocable, and enforceable...." 9 U.S.C. § 2 ; see, e.g. , Circuit City Stores, Inc. v. Adams , 532 U.S. 105, 113–19, 121 S.Ct. 1302, 149 L.Ed.2d 234 (2001) ( )(citing 9 U.S.C. §§ 1 – 2 ); Chiron Corp. v. Ortho Diagnostic Sys., Inc. , 207 F.3d 1126, 1130 (9th Cir. 2000) ; Tracer Research Corp. v. Nat'l Envtl. Servs. Co. , 42 F.3d 1292, 1294 (9th Cir. 1994), cert. dismissed , 515 U.S. 1187, 116 S.Ct. 37, 132 L.Ed.2d 917 (1995). "Although [a] contract provides that [state] law will govern the contract's construction, the scope of the arbitration clause is governed by federal law." Tracer Research Corp , 42 F.3d at 1294 (citing Mediterranean Enters., Inc. v. Ssangyong Corp. , 708 F.2d 1458, 1463 (9th Cir. 1983) ); see Circuit City Stores, Inc. v. Adams , 279 F.3d 889, 892 (9th Cir. 2002) ( ); Simula, Inc. v. Autoliv, Inc. , 175 F.3d 716, 719 (9th Cir. 1999) (); Chiron Corp. , 207 F.3d at 1130–31 ( ).5
"Notwithstanding the federal policy favoring it, ‘arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.’ " Tracer Research Corp. , 42 F.3d at 1294 (quoting United Steelworkers of Am. v. Warrior & Gulf Navigation Co. , 363 U.S. 574, 582, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960) ); see French v. Merrill Lynch, Pierce, Fenner & Smith, Inc. , 784 F.2d 902, 908 (9th Cir. 1986). Where the arbitrability of a dispute is in question, a court must look to the terms of the contract. See Chiron Corp. , 207 F.3d at 1130. " ‘Any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration.’ " Simula , 175 F.3d at 719 (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp. , 460 U.S. 1, 20, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983) ); see French , 784 F.2d at 908.
However, a court "cannot expand the parties' agreement to arbitrate in order to achieve greater efficiency [and] the [FAA] ‘requires piecemeal resolution when necessary to give effect to an arbitration agreement.’ "...
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