Bynum v. Maplebear Inc., 15-CV-6263

209 F.Supp.3d 528

Melody BYNUM, Plaintiff,

v.MAPLEBEAR INC., d/b/a Instacart, Defendant.

15-CV-6263

United States District Court, E.D. New York.

Signed September 19, 2016

Melody Bynum represented by Abdul Karim Hassan, Abdul Hassan Law Group, PLLC, 215-28 Hillside Avenue, Queens Village, NY 11427, 718-740-1000, Fax: 718-740-2000, Email: abdul@abdulhassan.com.

Maplebear Inc., doing business as Instacart represented by Alice Keeney Jump, Reavis Parent Lehrer LLP, 41 Madison Avenue, 41st Floor, New York, NY 10010, Email: ajump@rpl-law.com, Benjamin W. Berkowitz, Nikki Vo, Ryan Wong, Keker & Van Nest LLP, 633 Battery Street, San Francisco, CA 94111, Email: bberkowitz@kvn.com, Email: nvo@kvn.com, Email: rwong@kvn.com.

POST REMAND MEMORANDUM, ORDER & JUDGMENT

JACK B. WEINSTEIN, Senior United States District Judge

I. Introduction ...530

II. Procedural Background...531

A. Arbitration Compelled; Case Stayed...531

B. Request for Modification of February Order Denied ...532

C. Dismissal and Mandate by Court of Appeals for the Second Circuit ...532

D. Plaintiff's Motion for Leave to Appeal ...533

E. Hearing on Plaintiff's Motion and Court of Appeals' Mandate ...533

III. Law...534

A. Certification Pursuant to 28 U.S.C. § 1292(b)...534

B. Stay of Litigation when Arbitration is Compelled ...534

C. Dismissal ...535

IV. Application of Law to Facts...536

A. Certification Pursuant to 28 U.S.C. § 1292(b)...536

B. Dismissal on the Merits ...538

V. Conclusion ...542

I. Introduction

The case is before this court upon a mandate from the Court of Appeals for the Second Circuit. See Mandate, United States Court of Appeals for the Second Circuit, July 13, 2016, ECF No. 41 ("Mandate"). In a memorandum and order dated February 12, 2016 ("February Order"), this district court had granted defendant's motion to compel arbitration and stayed proceedings pending arbitration. See generally Bynum v. Maplebear Inc. , 160 F.Supp.3d 527 (E.D.N.Y. 2016), appeal dismissed (July 13, 2016).

Plaintiff had initiated the action to recover unpaid overtime and other expenses under the Fair Labor Standards Act ("FLSA") and New York Labor Law ("NYLL"). After severing unconscionable provisions relating to venue and fees, the February Order ruled that the parties had entered into a valid arbitration agreement and plaintiff's claims fell within its scope.

Plaintiff appealed. The Court of Appeals for the Second Circuit dismissed the appeal. It ruled that because a stay rather than dismissal was granted, the February Order is non-final and a court of appeals does not have jurisdiction. The mandate stated that "[t]he district court should determine, in the first instance, whether the Appellant's waiver of the right to arbitrate entitles the Appellant to termination of the existing stay and dismissal of the action, and/or whether certification under 28 U.S.C. § 1292(b) is appropriate." Mandate, July 13, 2016.

Plaintiff then filed a motion in the district court for leave to appeal. She seeks either (1) certification of the February Order pursuant to section 1292(b) of the United States Code, title 28, or, in the alternative, (2) a finding that the February Order is final in light of her intention to "waive" arbitration. See Pl.'s Mot. for Leave to Appeal, Aug. 18, 2016, ECF No. 44 ("Pl.'s Mot. for Leave to Appeal"). Defendant filed a memorandum in opposition to plaintiff's motion. See generally Def.'s Mem. in Opp'n to Pl.'s Mot. for Appellate Certification, Aug. 31, 2016, ECF No. 51 ("Def.'s Opp'n Mem.").

Whether certification is proper under section 1292(b) of the United States Code, title 28, depends upon whether the order involves "a controlling question of law as to which there is substantial ground for difference of opinion" and whether "an immediate appeal from the order may materially advance the ultimate termination of the litigation." Plaintiff argues that the relevant "controlling question" is whether FLSA claims are non-arbitrable as a matter of law. See Pl.'s Mem. in Supp. of Mot. for Leave to Appeal, Aug. 18, 2016, ECF No. 45 ("Pl.'s Mem."), at 3-7; see also Pl.'s Reply in Supp. of Mot. for Leave to Appeal, Sept. 6, 2016, ECF No. 53 ("Pl.'s Reply Mem."), at 1-6. This argument has no force. The Supreme Court has specifically recognized the arbitrability of statutory claims. Courts both within and outside this circuit—including in cases involving the same defendant, agreement, and facts as in the instant case—have enforced valid agreements to arbitrate FLSA claims. See infra Part IV.A.

In the alternative, plaintiff states she will "waive her right to arbitration" and requests that the court rule the February Order final and appealable in light of such a waiver. "[T]he relevant question," plaintiff argues, "is whether a party can convert a non-final order into a final order for purposes of appeal by waiving further action in a case." Pl.'s Mem. at 9. She says she understands that, should the Court of Appeals not find in her favor, she will end up foregoing her claims entirely. Id. (stating that "Plaintiff waives arbitration with the understanding that if she loses the appeal, she will also lose her claims and cannot thereafter pursue them in arbitration"); see also Hr'g Tr., Sept. 8, 2016, ECF No. 58 at 5:8-14, 9:13-21, 13:22-14:5; infra Part IV.B.

Plaintiff's counsel brought a near identical claim on behalf of a different plaintiff in the Southern District of New York, against the same defendant. That action was decided contemporaneously with the instant one. See Moton v. Maplebear Inc. , No. 15–CV–8879, 2016 WL 616343 (S.D.N.Y. Feb. 9, 2016). The Moton judge found the arbitration agreement valid, granted defendant's motion to compel arbitration, and stayed court proceedings pending arbitration. The plaintiff appealed that decision and the Court of Appeals for the Second Circuit issued the same mandate as in the instant case. See Moton v. Maplebear Inc. , No. 15–CV–8879, Mandate, United States Court of Appeals for the Second Circuit, July 13, 2016, ECF No. 37.

For the reasons stated orally on the record, the instant case is dismissed on the merits. See generally Hr'g Tr., Sept. 8, 2016, ECF No. 58. On the advice of counsel, plaintiff indicated her refusal to arbitrate. See id. at 5:3-18, 9:13-21, 9:25-10:3, 14:2-5, 17:9-20. There is no reason to delay dismissal when plaintiff states she is abandoning the case. See, e.g. , id. at 18:17-19:2. The court makes no finding with respect to whether the instant dismissal will allow plaintiff to appeal the February Order. Plaintiff was advised that dismissal on the merits would probably result in her foregoing her claims entirely. See id. at 5:8-14, 9:13-21, 13:22-14:5.

II. Procedural Background

A. Arbitration Compelled; Case Stayed

Plaintiff alleged that she was misclassified as an independent contractor and was not paid overtime wages in violation of the FLSA and NYLL. See generally Compl., Oct. 30, 2015, ECF No. 1 ("Compl."). She had entered into an employment contract with defendant. Included was an agreement to arbitrate disputes before JAMS, a national private organization providing arbitration services. See Bynum , 160 F. Supp. 3d at Part II.B.

In February 2016, this court granted defendant's motion to compel arbitration. After severing the arbitration agreement's objectionable venue and fee-related clauses, it determined that the parties had entered into a valid and enforceable agreement to arbitrate, which encompassed plaintiff's wage claims. Rejected was plaintiff's argument that FLSA claims are per se nonarbitrable. The case was stayed—rather than dismissed—pending arbitration, pursuant to section 3 of the Federal Arbitration Act ("FAA") and defendant agreed to commence the arbitration. The court ordered:

The case is stayed pending arbitration pursuant to section 3 of the FAA.

Defendant shall promptly file an arbitration demand with JAMS in New York. If JAMS is unwilling to accept the arbitration in New York for any reason, either party shall by letter notify the court. The court will then set a trial date. The parties and JAMS are requested to take appropriate prompt steps to determine whether the arbitration can go forward.

Id. at 541–42.

B. Request for Modification of February Order Denied

On February 29, 2016, plaintiff wrote to the court stating that she had decided to "decline arbitration, and take an appeal as of right to the Second Circuit." Pl.'s Letter re Appellate Review of Arbitration Order, Feb. 29, 2016, ECF No. 37 (emphasis added). Plaintiff explained that:

[A]fter a careful and further review of the Court's order, JAMS' rules and its arbitration process, arbitration jurisprudence, the many inconsistencies and uncertainties, and a variety of scenarios, we have concluded that there is no guarantee that Plaintiff will not lose her FLSA rights in arbitration, or be responsible for costs and fees, when the dust settles .... Defendant has also indicated that a co-worker of Plaintiff will likely face counterclaims in arbitration—it is therefore a real possibility that Defendant may use counterclaims strategically and improperly against Plaintiff ....

As such, Plaintiff has concluded that the potential benefits of recovering a relatively small amount of wages, are prohibitively outweighed by the risks and potential costs of arbitration in the context of this case.

Because Plaintiff cannot take such risks, she has decided to decline arbitration, and take an appeal as of right to the Second Circuit Court of Appeals.

Id. at 1–2.

Plaintiff requested that the court "convert its stay to a dismissal of the action," so that she could pursue an appeal of the February Order. Id. at 2 (emphasis added). Simultaneously, she filed a notice of appeal. See Notice of Appeal as to Order on Mot. to Compel, Feb. 29, 2016, ECF No. 38.

Defendant contended that plaintiff could not pursue an appeal as "of right" from an order compelling arbitration under the FAA. Its position was that, while an interlocutory appeal may be taken from an order denying a motion to...