Bryant v. Domino's Pizza Inc.

1

SARAH BRYANT, Plaintiff, v. DOMINO'S PIZZA INC, DOMINO'S PIZZA LLC, and DOMINO'S PIZZA FRANCHISING LLC, Defendants.

No. 22-11319

United States District Court, E.D. Michigan, Southern Division

August 24, 2023

OPINION AND ORDER RESOLVING SHOW-CAUSE ORDER [33] DENYING WITHOUT PREJUDICE DEFENDANTS' MOTION TO COMPEL [16] AND GRANTING LIMITED DISCOVERY UNDER RULE 56(D)

LAURIE J. MICHELSON, UNITED STATES DISTRICT JUDGE.

Sarah Bryant worked as a delivery driver for a Domino's Pizza franchisee for 11 months. Bryant says that Domino's-through its control of the franchisee-failed to pay her and other delivery drivers the legally required minimum wage and overtime wages because it did not “adequately reimburse them for their automobile expenses or other job-related expenses.” (ECF No. 1 PageID.11.) Bryant also alleges that Domino's failed to adhere to the tip-credit requirements under the Fair Labor Standards Act. (Id. at PageID.13-14, 16-18.) So Bryant sued Domino's Pizza, Inc., Domino's Pizza Franchising, LLC, and Domino's Pizza, LLC on behalf of herself and other similarly situated drivers for violating FLSA wage and overtime requirements. Over thirty other Domino's drivers have opted into this litigation on the docket. (See ECF Nos. 7, 9, 10, 12, 24.)

Apparently in response to the complaint, Defendants moved to compel Bryant to arbitration based on an agreement between her and ostensibly, the franchisee. (ECF No. 16.) Bryant asserts she needs more discovery under Federal Rule of Civil Procedure 56(d) to respond to the motion to compel arbitration. (ECF No. 26.)

For the following reasons, the Court denies most of Bryant's requests for discovery, but will allow discovery on two narrow issues involving unconscionability. Accordingly Defendants' motion to compel arbitration (ECF No. 16) is dismissed without prejudice to refiling once the limited discovery is completed.

I.

A motion to compel arbitration under § 4 of the Federal Arbitration Act is treated like a Rule 56 motion for summary judgment, and, as the moving party, Defendants “had the initial duty to present evidence that would allow a trier of fact to find all required elements of a contract . . . because [they] bore the burden of proof on [their] contract claim under § 4.” See Boykin v. Family Dollar Stores of Mich., LLC, 3 F.4th 832, 839 (6th Cir. 2021).

II.

A. Delegation Clause

Before the Court addresses the motion, it will discuss a preliminary issue. Upon review of the arbitration agreement, the Court noted that there appeared to be a delegation clause in the agreement. As neither party had addressed the clause, the Court issued a show-cause order pursuant to Federal Rule of Civil Procedure 56(f) asking for additional briefing on the delegation-clause issue. (ECF No. 33.)

In response to the Court's order, Defendants explained that they did not raise enforcement of the delegation clause “because, while one section of the Arbitration Agreement expressly requires arbitration of ‘[a]ny claim, dispute, and/or controversy relating to the scope, validity, or enforceability of this Arbitration Agreement,' another section states that ‘[q]uestions of arbitrability, including the validity of this agreement . . . shall be decided by a court, not by an arbitrator.'” (ECF No. 36, PageID.502 (citing ECF No. 16-3, PageID.356, 367).) “[T]his inconsistency,” say Defendants, “likely deprived the Agreement of the ‘clear and unmistakable' evidence needed to show that the parties agreed to have an arbitrator decide gateway issues.” (Id. (citing Blanton v. Domino's Pizza Franchising LLC, 962 F.3d 842, 844 (6th Cir. 2020).)

For this reason, the Court concludes that Defendants intended to waive the issue. See Ohio State Univ. v. Redbubble, Inc., 989 F.3d 435, 443 (6th Cir. 2021) (explaining that waiver “is the intentional relinquishment or abandonment of a known right”). Thus, the delegation clause will not be enforced, and the Court will consider the other issues raised by the motion.

Accordingly, the issue of whether a valid arbitration agreement exists and whether Defendants can enforce the agreement is for this Court to decide. See Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63, 71 (2010) (“If a party challenges the validity under § 2 [of the FAA] of the precise agreement to arbitrate at issue, the federal court must consider the challenge before ordering compliance with that agreement under § 4.”).

B. Motion to Compel and Rule 56(d)

In their motion to compel arbitration, Defendants focus on whether they-as third parties-should be entitled to enforce Bryant's arbitration agreement with Domino's franchisee, GT Pizza, Inc. (ECF No. 16.)

In response, Bryant invokes Federal Rule of Civil Procedure 56(d), which provides that “[i]f a nonmovant shows by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition, the court may . . . allow time to obtain affidavits or declarations or to take discovery[.]” The affidavit or declaration in support of additional discovery “must indicate the need for discovery, what material facts may be uncovered, and why the information has not been previously discovered.” Siggers v. Campbell, 652 F.3d 681, 696 (6th Cir. 2011); see also Cacevic v. City of Hazel Park, 226 F.3d 483, 489 (6th Cir. 2000). “Courts in this circuit have denied requests to defer under Rule 56(d) when the ‘affidavit fail[ed] to provide concrete examples of the discovery sought' such as ‘a description of the documents, depositions, affidavits, or other evidence to support' a response in opposition.” Lookout Mountain Suites, LLC v. Pinkston, No. 1:18-cv-311, 2021 WL 722732, at *3 (E.D. Tenn. Feb. 24, 2021) (quoting in part NCMIC Ins. Co. v. Smith, No. 2:18-cv-533, 2019 WL 1958651, at *3 (S.D. Ohio May 2, 2019)); see also Palmer v. Mary Jane M. Elliot, P.C., No. 20-13209, 2021 WL 1626355, at *2 (E.D. Mich. Apr. 27, 2021) (granting discovery under Rule 56(d) where party identified a specific agreement and four depositions it needed to prove that a genuine dispute of material fact existed).

Specifically, Bryant identifies four issues she says she needs discovery on before she can respond to Defendants' motion to compel arbitration: one, “[w]hether valid, enforceable arbitration agreements exist between the opt-in Plaintiffs and Defendants”; two, “Plaintiffs['] . . . role in the transportation of goods in interstate commerce for Defendants”; three, “the relationship between Defendants and GT Pizza, Inc.”; and four, “procedural and substantive unconscionability.” (See generally ECF No. 26.)

The Court addresses each area of requested discovery in turn.

E Existence of Arbitration Agreements for opt-in Plaintiffs

Start with Bryant's request for discovery of arbitration agreements that Defendants “would seek to enforce” as to the opt-in Plaintiffs. (ECF No. 26, PageID.429.)

The Court clarifies that it reads Defendants' motion to compel arbitration as impacting and asserting their rights as to Bryant alone. So discovery as to the arbitration agreements affecting other opt-in Plaintiffs is not relevant to the motion and would not uncover “facts essential to justify [Bryant's] opposition” to the motion to compel arbitration. See Fed.R.Civ.P. 56(d); see also Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 22 (1983) (discussing Congress' intent “in the Arbitration Act[] to move the parties to an arbitrable dispute out of court and into arbitration as quickly and easily as possible”). And of course, Defendants have produced the arbitration agreement that they wish to enforce against Bryant, which is the only agreement at issue now. (See ECF No. 16-3.) As such, the Court finds that Bryant is not entitled to discovery on the existence of arbitration agreements applicable to the opt-in Plaintiffs at this time.

However, contrary to Defendants' position, the Court does not intend to dismiss the entire action even if it does ultimately send Bryant to arbitration. As Bryant has pointed out, the individuals who have already opted into the collective are akin to parties. See Canaday v. Anthem Companies, Inc., 9 F.4th 392, 394 (6th Cir. 2021) (“Once they opt in, these plaintiffs become ‘party plaintiffs,' enjoying ‘the same status in relation to the claims of the lawsuit as do the named plaintiffs[.]”); see also 29 U.S.C. § 216(b). Of course, this may change upon a court's determination of whether the employees are similarly situated such that a collective action can be maintained. But for the time being, the Court sees no reason it would not grant leave to amend the complaint and to substitute a new named plaintiff from the opt-in plaintiffs. See Green v. Platinum Restaurants Mid-Am., LLC, No. 3:14-CV-439, 2020 WL 1452724, at *6 (W.D. Ky. Mar. 25, 2020) (“[D]ismissal of the Named Plaintiffs does not require the FLSA collective action to be dismissed when, as here, there are other plaintiffs that have opted into the collective action. Instead, when the named plaintiffs' FLSA claims are dismissed, courts customarily grant plaintiffs leave to substitute opt-in plaintiffs for those dismissed named plaintiffs.”).

If such an amendment to the complaint is necessary, the Court is also inclined to grant Bryant's discovery request as to the existence of arbitration agreements that may potentially bind the opt-in Plaintiffs. Cf. Clark v. A&L Homecare & Training Ctr., LLC, 68 F.4th 1003, 1012 (6th Cir. 2023) (“We therefore respectfully disagree that district courts can or should determine, ‘by a preponderance of the evidence,' whether absent employees have agreed to arbitrate their claims.” (emphasis added)). Such a request will aid Bryant in substituting a named plaintiff that may maintain this litigation-to the...